Comp + Immigration = SCOTUS

The immigration policy of this country has routinely been found by the United States Supreme Court to be a federal issue, even as states attempt to frame it within the context of laws that have nothing to do with immigration.

Florida's Supreme Court recently refused to disturb lower appellate court holdings that a workers' compensation statute could be more broadly interpreted to criminalize the lack of legal residency even if there had been no claim for workers' compensation benefits.

It appears that the U.S. Supreme Court, again, won't stand for a state trying to legislate and adjudicate immigration issues.

The court on Wednesday announced that Brock v. State of Florida has been distributed to the justices for conference on Feb. 20.

This doesn't mean that the court is going to accept the case for hearing. But it is a very good indication that the court is interested in the case so the probability that it will actually hear it is good.

Francisco Brock – also known as Armando Lopez-Bock – was arrested after a raid at Waste Pro USA, and charged with violating Florida Statutes Section 440.105(4)(b)9.

Section 440.105(4)(b)9 of Florida statutes makes it unlawful for a person to present "any false, fraudulent, or misleading oral or written statement to any person as evidence of identity for the purpose of obtaining employment or filing or supporting a claim for workers’ compensation benefits."

Brock's coworker, Hector Jordan – also known as Jordan Hector – was also arrested and prosecuted under the same statute.

Violation of Section 40.105(4)(b)9 is a third-degree felony, punishable by up to five years in prison.

Brock and Jordan went to trial in a consolidated proceeding. They moved to dismiss the charge against them on the basis that neither could have committed comp fraud when neither had ever filed a comp claim.

The judge granted their motion, finding the state was "required to prove that they obtained employment for the purpose of workers' compensation benefits" to establish a violation of Section 40.105(4)(b)9.

But the 4th District Court of Appeal reversed the judge last April.

The 4th DCA said Section 40.105(4)(b)9's use of the word "or" indicated that it could be violated in two ways – by the presentation of false information for the purpose of obtaining employment, and by the presentation of false information for the purpose of obtaining workers' compensation benefits.

Based on its reading of the statute, the 4th DCA found the Legislature "specifically intended to make it a felony for a person to knowingly present any false or misleading identification for the purpose of obtaining employment, irrespective of the existence of any workers' compensation claim."
Brock and Jordan both appealed to the Florida Supreme Court citing a conflict of laws in that the 1st DCA in an earlier case known as "Matrix," which held that a worker who presents a false Social Security card for the purpose of obtaining employment is still entitled to workers' compensation benefits, was in conflict.

The Florida Supreme Court wasn't interested.

In the past the U.S. Supreme Court has recognized the Immigration Reform and Control Act of 1986 as the federal government's assertion of control over the regulation of the employment of undocumented workers.

Part of the "immigration problem" this country has is that there is a disconcerted voice on immigration policy because states, particularly border states, seem to have their own agenda on immigration.

But immigrants, legal or not (and the vast majority of us are descendents of illegal immigrants), have a place in this country, have established important cultural roots in this country, provide a source of economic activity (don't get me started that they are a drain on the economy - there are study after study that say the exact opposite), and, bottom line, they are human beings deserving of what this country stands for: life, liberty and the pursuit of happiness.

I'm thrilled that the U.S. Supreme Court is giving the Brock case consideration, and hope that it hears the issues.

After all, its not often that workers' compensation makes its way to the very highest court of the land.

The Work Immigration Enigma

Immigration into the United States, particularly through channels that aren't deemed "legal" has always been an emotionally charged issue.

When I was practicing workers' compensation defense law the majority of my cases seemed to (I don't have firm statistics - purely anecdotal) involve mono-lingual, hispanic workers without proper documentation of their authorization to be in the United States.

And since I practiced in California, particularly Southern California, which encompassed the lower half of the Central Valley (breadbasket to the world for many crops), and Ventura County (the only place in the world that produces three crops of strawberries a year), these folks were usually farm workers.

These farm workers were particularly suspect to abuse, as I came to realize after years of deposing them. It seemed that the particular plight of these folks generally followed the same path. Certainly some endured less abuse than others, certainly some set themselves up for more abuse than others - but clearly due to their socio-economic demographic they represented a pattern of exploitation upon them that most of us don't experience, let alone endure.

The Los Angeles Times last month ran a series on the delicious produce we enjoy in United States grocery stores that is grown in Mexico and imported. You've seen these vegetables and fruits - perfect in size and color, just as tasty if not more so than locally grown, and available for purchase "out of season."

But the produce, despite U.S. corporate promise to the contrary, is grown and harvested using abusive labor practices akin to slavery: farm workers trapped in barbed wire fenced camps - escapees are beaten and confined to solitude; children as young as 10 years old forced to toil up to 12 hours per day to earn less than $20 per day to help feed their families while they subsist on a stack of tortillas for the day; labor camp bosses withholding wages from workers to "pay" for overpriced goods sold at camp "stores" to the laborers leaving nothing for the workers to take home; squalid living conditions where multiple families share a roof and not much more without running water or electricity.

Read that series, and you will understand why the United States is such an enticing destination despite the risks of travel, "coyotes," immigration, habitation; all to work the lowest level of the labor chain, at the bottom of the wage scale.

These people were not only subject to abuse in their home land, but also in the United States in the various social systems, not the least of which is workers' compensation.

When I was practicing in the 1980s and early 1990s one of the more common schemes was to solicit mono-lingual immigrant hispanic workers via "cappers" who were paid to bring in "patients" to medical facilities and made promises to the workers of free medical care and payment of cash for their troubles.

Targeting immigrants for more abuse...

The scheme wasn't about inflating medical treatment, or skimming attorney fees from settlements (though those activities invariably occurred) - the real meat of these schemes was to generate medical-legal bills in all areas of medical specialization on a single claim. The old neck bone is connected to the back bone is connected to the chest bone is connected to the hip bone is connected to the leg bone, etc. These came to be known as "skin and contents" claims. The reports from the specialists conducting the medical-legal evaluations all came from the same clinics, and the bills came from the same billing facility.

The reports all looked and read the same, and when I would ask a claimant in deposition about all of this activity they were completely clueless. There was more than just a few occasions where the claimant would deny ever having any claim of psychological complaint, for instance, despite what the medical report would say.

Try as we might with United States laws, there always seems to be a steady tide of people that are willing to risk everything to escape the literal hell of their native countries - being illegal in the United States is more comforting than being legal in the home land.

So laws get passed to ease this tension: amnesty, drivers licenses, labor. Law makers try to accommodate this class of people because they know (and I think even the most conservative, ardent objector to immigration liberalization know as well) that reducing immigration violation can't be accomplished without host country reform of its own laws and practices.

In the workers' compensation context there always seems to be an issue of whether or not a worker without proper immigration documentation can receive benefits. In general, most rulings have come down on the side of the injured worker for purposes of basic benefits such as treatment and indemnity, but any benefit that would entail re-employment, such as vocational rehabilitation services, is not available as that would be to sanctify violation of U.S. laws.

There are U.S. Supreme Court and the Florida Supreme Court cases pending to determine if workers who used false Social Security numbers to gain employment can be prosecuted for workers' compensation fraud, even if they haven't filed claims for benefits.

Florida has a law on the books that broadly provides for prosecution for fraud if one uses false documentation, not otherwise defined or specified. The law is in the workers' compensation statutes, but has been interpreted to apply outside of the work comp realm.

Last year, the Florida 4th District Court of Appeal upheld an interpretation of Florida Statutes Section 440.105(4)(b)9 as allowing charges to be brought against a garbage hauler who had been using a fake Social Security number, even though he had never filed an injury claim.

Arizona had a similar law that the U.S. Supreme Court struck down in 2012.

Francisco Brock, also known as Armando Lopez-Brock, filed a petition for writ of certiorari with the nation's highest court on Dec. 26, arguing that Florida's treatment of the presentation of a false Social Security number as a 3rd degree felony under the state Workers’ Compensation Law violates the Supremacy Clause of the U.S. Constitution.

"According to Brock [the Florida 4th District Court of Appeals decision from which this appeal to the US Supreme Court is taken], any and all undocumented workers can be charged and convicted of workers’ compensation fraud, a felony, for using any false identity to obtain employment, even though there is no workers’ compensation connection," he wrote in his petition.

The state has until Jan. 29 to respond to his arguments in the case, now titled Brock v. State of Florida.

In the meantime, the Florida Supreme Court has another, similar, matter pending before it called Hector v. State of Florida.

Hector Jordan, Jordan Hector, had worked for Waste Pro USA, along with Brock. Both men were arrested in a raid on the company back in 2012, and both were charged with violating Section 40.105(4)(b)9.

Both Brock and Jordan won on motions for dismissal at the trial level, but those were reversed by the 4th DCA. The Florida Supreme Court refused to take Brock's case, which is why it is before the U.S. Supreme Court, but has not yet made a decision on Jordan's case.

Jordan's petition is virtually identical to Brock's, and it asserts that the 4th DCA's decision is in conflict with a 2008 ruling from the 1st DCA in Matrix Employee Leasing v. Hernandez.

In the Matrix case, Leopoldo Hernandez admitted that he had used a false Social Security number for the purpose of obtaining employment and that this conduct violated Section 440.105(4)(b)(9).

However the 1st DCA said Hernandez was entitled to workers' compensation benefits after he got hurt on the job because there was no evidence Hernandez had violated Section 440.105(4)(b)(9) "for the purpose of obtaining workers’ compensation benefits."

Though both Brock and Jordan cited Matrix to the 4th DCA, the court said that it was inapplicable to their situation since they were involved in a criminal case, and the 1st DCA analysis of Section 440.105(4)(b)9 had been limited to how the statute applied to the denial of coverage in a workers' compensation case.

We'll ultimately, of course, see how the courts deal with Brock and Jordan - the point is that there is still a second class of human in the work force: those who desire to escape deplorable conditions that, though outlawed, still continue because there's a market (the United States principally) for the goods and services that those without "documentation" produce.

There's been a lot of debate about immigration reform, and President Obama has taken heat lately for proposing executive action due to stalemate in Congress. It's a complicated issue, no question about it.

But workers' compensation should not be about immigration, legal documentation or anything other than whether one gets hurt on the job.

Yes, workers' compensation is a political football - certainly that's what contributes to its needless complexity. But work injury protection laws were not intended to regulate immigration status.

And that's the sad part. There's a large population that comes to this country to escape impoverishment, escape child labor, escape indentured servitude, only to find that there are vultures on the other side of the border happy to exploit their fears, insecurities and ignorance.

Immigration, Obama and Bloggers

Tomorrow legions of workers' compensation professionals will descend upon Las Vegas for the annual Bacchanalia commonly known as the National Workers' Compensation and Disability Conference at the Mandalay Hotel.

Of course I'll be there, part of the popular Blogger's Panel in which we debate the workers' compensation issues of the day.

On Thursday at 3:45 p.m. Joe Paduda, Becki Schaffer, Bob Wilson, and I will field questions from Mark Walls.

Walls decided to prime the pump yesterday by sparking interest in President Obama's announcement that he is considering amnesty to undocumented workers by executive order.

"If President Obama makes 5 million illegal aliens legal by executive order, what impact positive or negative could this have on the workers comp industry?" Walls wrote to the group.

This started off a firestorm with Paduda and Wilson trading barbs at each other all day long by group email.

Great Mark, thanks for getting these guys fired up!

Schaffer threw up a graphic demonstrating that incurred losses would go out of control, at least for a year or two, based on statistics from when President Ronald Reagan pushed for immigration reform back in 1986.

Schaffer's graphic

In 1986, Congress and Reagan enacted a sweeping overhaul that gave legal status to up to 3 million undocumented immigrants, if they had come to the U.S. before 1982. Spouses and children who could not meet that test did not qualify.

This segregation incited protests that the new law was breaking up families.

Early efforts in Congress to amend the law to cover family members failed. In 1987, Reagan's Immigration and Naturalization Service commissioner announced that minor children of parents granted amnesty by the law would get protection from deportation.

Spouses and children of couples in which one parent qualified for amnesty but the other did not remained subject to deportation, leading to efforts to amend the 1986 law.

Likewise, the Senate acted in 1989 to broaden legal status to families but the House never took up the bill. Through the Immigration and Naturalization Service, Bush advanced a new "family fairness" policy that put in place the Senate measure. Congress passed the policy into law by the end of the year as part of broader immigration legislation.

Obama's anticipated executive order could come as early as this coming week and cover as many as 5 million people. Like Bush, Obama is expected to extend deportation protections to families of U.S. citizens or permanent residents.

Whether or not there is any big impact on workers' compensation is, of course, subject to debate. Paduda argued to the group that there would be no great impact and that the nation's immigration policy was a waste of money - that funds presently used to support a massive presence at the borders was better put to use on real criminal enforcement.

Wilson argued that there are laws in place for a reason and that Obama was being arrogant and had no legal authority to declare 5 million people "legal" by his fiat.

Separately, Peter Rousmaniere, not on this upcoming blogger panel but one who also has a distinct opinion on immigration, feels that there may be a slight up tick in claims because these workers tend to occupy the most injury prone jobs.

"This may happen in earnest in selected situations, where undocumented workers have reported relatively few of their injuries and now feel empowered to file claims, with claimant bar and activist group encouragement," Rousmaniere writes in a WorkCompCentral column (free to all). "For the workers' compensation field as a whole, the impact could be modest. Even if the number of lost-time compensable claims of undocumented workers increased by 50%, the total increase of such claims in the workers' comp field would be, I expect, a couple of percentage points, spread over several years."

The reason, Rousmaniere notes, is because, "Among the largest 100 jobs, undocumented workers account for about 4.5% of all workers. Because they tend to hold more injury-prone jobs, they likely incur about 8% of lost-time compensable injuries – or would if they filed claims at the same rate as authorized workers do."

As with any big issue the questions and the answers are not so clear and easily established. There will be winners and there will be losers.

Potential winners in this program, at least in the short term, are the insurance companies that should see increased premiums as a result of increased payroll reporting; that is assuming that the employers which traditionally tend to skirt employment laws actually comply when their workers are no longer "undocumented" and because, experience has taught us, once these workers become "documented" and, ergo, "legal" their wages tend to increase.

In addition, the industries in which the most undocumented workers are found are among the highest in occupational risks: farming, construction, hospitality, and institutional (building and grounds maintenance). Those occupational codes rate much higher and thus produce much larger premiums.

My best guess is that there isn't going to be any great impact on workers' compensation overall, that the industry will move along like it nearly always does with the various parts doing what they do best, California will be most heavily impacted (because it has, by far the largest immigrant population employed in the most hazardous occupations) and there will be some scapegoat identified somewhere upon whom we can foist collective discontent.

Come to the Bloggers' Panel Thursday at 3:45 to get more of this barb tossing (breakout session CM6).

Sierra versus Salas

In June the California Supreme Court ruled that Sierra Chemical Co.'s argument that Vicente Salas was not legally eligible to hold a job in the United States was not a complete defense to the worker's claims under the state's Fair Employment and Housing Act.

The company has now asked the United States Supreme Court to review that decision, arguing that Federal immigration law and policy override California's FEHA laws.

Salas started working for Sierra Chemical in 2003. He signed an employment eligibility verification form, where he wrote a Social Security number and provided a resident alien card that attested to his eligibility to work in the United States. Salas also signed a W-4 income tax statement, using the same Social Security number.

He later hurt his back and filed a claim for workers' compensation benefits. He was able to return to work, subject to medical restrictions, but was laid off that December as part of Sierra's seasonal reduction of production line staff.

Sierra sells swimming pool chemicals so when the weather cools, demand decreases and the company lays off many of its production line employees, recalling them when consumer demand rises with the temperatures in the spring.

Sierra offered to rehire Salas in the summer of 2007 if he obtained a release from his doctor authorizing him to return to full-duty status. Salas' doctor, however, would not clear him to work without restrictions.

So Salas sued Sierra, alleging that he was disabled and that Sierra had failed to provide reasonable accommodations under California FEHA law among other causes of action.

During discovery, Sierra learned that the Social Security number it had on file for Salas was being used by a North Carolina man, Kelley R. Tenney. Tenney averred, under oath, that the number was assigned to him, and that he had not given Salas permission to use his Social Security number to obtain work.

Sierra then raised defenses that Salas' FEHA claims should be barred under the equitable doctrines of after-acquired evidence and unclean hands.

The after-acquired evidence doctrine is a defense against discrimination or refusal-to-hire suits, where the employer discovers wrongdoing that otherwise would have resulted in termination or refusal to hire. The unclean hands doctrine says that it is unfair to grant relief to a person accusing someone else of wrongdoing if he engaged in a wrongdoing himself.

The Superior Court ruled that Salas could not bring a FEHA claim against his employer, as a matter of law, since he was "not lawfully qualified" to take the position that he allegedly was denied after he suffered his industrial injury.

The 3rd District Court of Appeal upheld her decision, but a majority of the California Supreme Court reversed, concluding that undocumented employees are entitled to pursue claims for retaliation and discrimination against their employers.

Justice Joyce Kennard, retired but sitting on the bench by special appointment, wrote for the majority that it would "frustrate rather than advance the policies underlying federal immigration law to leave unauthorized alien workers so bereft of state labor law protections that employers have a strong incentive to 'look the other way' and exploit a black market for illegal labor."

Justice Marvin Baxter dissented, stating that the question of whether Salas was ineligible under federal immigration law to be employed in the United States was an issue that had yet to be decided.

If Salas was in fact unable to legally hold employment, Baxter said he thought federal immigration laws ought to foreclose Salas from any recovery of post-termination lost wages under California law.

The California Supreme Court opinion is here.

The U.S. Supreme Court case is Sierra Chemical v. Salas, No. 14-369.

Fruit Dynamics Revisited

In July I opined that an arrest of 105 undocumented workers at a fruit packing plant in Florida, without also citing the employer where there is strong evidence that it too engaged in immigration fraud, was, "lightly veiled discrimination based on race. The masters aren't prosecuted for their fraud and deceit, but the powerless workers are punished for their enslavement."

This morning it was reported that the undocumented workers arrested in that raid have been given "diversion" which would allow the charges to be dropped assuming compliance by the accused.

It was also reported that an investigation into the employer is still ongoing.

The July 16 raid on Fruit Dynamics resulted in the 105 workers being charged with using counterfeit or fictitious personal information to obtain employment and using false identity information for the purposes of filing a workers’ compensation claim.

The vast majority of the arrested workers reportedly never filed a workers’ compensation claim, prompting criticism that the state was using workers’ compensation law as a tool for immigration enforcement.

Florida Statute 440.105(4)(b)(9) holds that it’s unlawful to “knowingly present or cause to be presented any false, fraudulent, or misleading oral or written statement to any person as evidence of identity for the purpose of obtaining employment or filing or supporting a claim for workers’ compensation benefits.”

Investigators from the Florida Division of Insurance Fraud and the Collier County Sheriff’s Department executed the July raid. Florida Chief Financial Officer Jeff Atwater said in a release at the time that the lead the investigators were following would “result in dozens of workers’ compensation arrests and many arrests for identity theft that have been potentially devastating for victims.”

It doesn't seem like that is the case after all.

But they KNEW Bowzer was undocumented...

The fact is that the few workers' compensation cases that were in process by workers injured at the Fruit Dynamics plant in Naples, FL resulted in termination of the workers - the employer clearly was sending a message to its undocumented workers: don't file a claim for injury.

Clearly the employer threatened, and executed, retaliatory action in order to keep its undocumented workforce complicit, and quiet.

Though frankly the charges against the workers arrested in my mind should just be dropped, at least the diversion program is the next best thing, except that now these poor folks also have to cough up $50 per month for the administrative cost of the program - and we know that these are people at the lowest rung of the economic ladder. $50 is meaningful to them...

According to this morning's report, though, Fruit Dynamics is also under investigation.

Ashley Carr, deputy director of communications for the Department of Financial Services, said Tuesday that “several allegations remain against the company” and that the investigation into those allegations was continuing, though she would not elaborate further.

The allegations against the company presently appear focused on misreported payroll. An October 2013 audit by Fruit Dynamics’ workers’ compensation carrier showed the company was underreporting its payroll. Guarantee Insurance Co.’s workers’ compensation policy covered 102 employees, but the plant employed an average of 165 employees five days a week according to documents filed in the case.

But attorneys and others representing the arrested workers say that the company knew it was hiring undocumented workers and used that fact as clubs against the workers to ensure their complicity and quietude.

This is more than payroll fraud. It is a case of racial discrimination bordering on enslavement.

Claimants’ attorney Michael Winer, president of Florida Workers’ Advocates, said, "to prosecute anybody under the banner of workers’ compensation fraud, when that person has never had a workers’ compensation accident, just fundamentally to me seems to be wrong.”

It's not just wrong, it's abuse, intolerance and bigotry under the color of law - and that is unforgivable in 2014.

Crossing the Freeway

A couple of days ago I posted about a Labor Day report from research group Economic Roundtable. The study showed that the number of "informal" laborers − those that the employer either doesn't report or misclassifies as independent contractors − grew 400% from 1972 to 2012.

Yesterday the University of Southern California in conjunction with the California Immigrant Policy Center, released a study concluding that the undocumented immigrant population in California comprised nearly 10% of the state workforce.

According to the study, based on Census data and other statistics, including data from the departments of Labor and Homeland Security, there are 2.6-million immigrants living in California without the required paperwork.

Particularly in Los Angeles County (which has been cited by the California Workers' Compensation Institute and other research groups as having much higher claim frequency than the rest of the state), of the 4.4 million immigrants living in the greater Los Angeles region, 1.1 million are here without permission, according to the report.

38% of the agriculture industry is comprised of undocumented workers, as is 14% of the construction industry, according to the report.

The Labor Day report from Economic Roundtable concluded that 16% of the construction industry was made up of illegal labor, resulting in lost premium of about $264 million.

Demonstrating how deeply ingrained into society the undocumented population is, the USC study found that half of these immigrants have already been in the state for 10 years or more.

And 58% of that population lacks any health insurance.

Typical signage along I-5 near San Onofre, CA, warns of immigrants crossing the freeway.

This has obvious implications for workers' compensation in California, which may be a primary source for medical treatment to that population. Though provision of return to work services would not be applicable based on both state and federal case law, just because one does not have immigration papers does not mean that workers' compensation benefits are inapplicable.

A larger issue is really the failure of the employers that use this labor because no payroll is generally associated with it, or falsified payroll information is provided - so not only are employment taxes avoided or discounted, so is workers' compensation premium.

With agriculture and construction having significant undocumented work forces, the impact is greater because of the high risk categories in such industries.

A headline in this morning's WorkCompCentral News highlights the issue - a Marin County contractor pleaded guilty to charges of working without a license, evading income taxes and failing to provide workers' compensation insurance.

Ronald Vernon Cupp of Corte Madera and his brother were hired to construct a sewage line at a shopping center in Mill Valley in February 2013. According an article in the Marin Independent Journal, Cupp paid his employees in cash, didn't report them on his taxes and didn't cover them through workers' compensation insurance.

About 1700 miles away from Sacramento, the Business and Industry Committee of the Texas House of Representatives continues to study the issue of worker misclassification.

Stephanie Gharakhanian, the Workers Defense Project’s research and policy director, told WorkCompCentral the organization is hoping that as a result of the committee’s report, the Legislature will consider “a more expansive misclassification bill” after the successful passage of House Bill 2015 last session.

That bill, which took effect at the beginning of this year, levied a $200 fine per worker on any Texas employer caught misclassifying employees on a public project.

A series of articles on worker misclassification in various states by news service McClatchyDC estimates that 37.7% of Texas construction workers are misclassified, based on a survey of 4,987 employees with 1,881 misclassifications found.

It also estimated a total of 316,793 misclassified workers statewide, listing as its source “Integrated Public Use Microdata Series 2011 Census records and McClatchy survey of workers” and says that its estimates are “derived from specific rates of misclassification over 12 specialties.”

Those interviewed for the WorkCompCentral story said the estimate sounds accurate based on anecdotal experiences; some said too high, some said too low ... must be just about right.

The impact of undocumented workers is both on the premium collection side, and on the work injury claim side - and probably not what you might think.

According to WorkCompCentral columnist, Peter Rousmaniere, in 2010 roughly 40% of work injuries and illnesses do not result in a workers’ comp claim. That might amount to well over 1 million claims that never were submitted, each year.

Though he doesn't engage any reasoning as to why there may not be reporting of an occupational injury or illness, saving that for another column, the fact of illegal work status is likely a big contributor.

At some point the political hot potato of immigration reform is going to have to be addressed. And the workers' compensation industry is going to have to keep a close eye on what ultimately gets decided by Congress.

How Dare They

Last week WorkCompCentral reported on a raid in Florida of a company, Fruit Dynamics, arresting over a hundred undocumented workers.

Investigators from the Florida Division of Insurance Fraud and the Collier County, Florida, Sheriff's Department arrested workers from Guatemala, Mexico, Honduras and El Salvador.

Florida Chief Financial Officer Jeff Atwater, who runs the division, called the arrests "workers' compensation fraud" even though only a few of the workers had filed injury claims. The arrests were made under Florida Statutes Chapter 440, the workers' compensation law, which makes it a third-degree felony to use false documents to obtain employment or file an injury claim.

Maj. Geoffrey Branch of the Division of Insurance Fraud told Fox News Channel 4 the week of the story that the owners are not suspected of any complicity in the fraud.

"At this time, we do not believe anybody affiliated with the ownership or management had any idea that any of these documents were fraudulent," Branch said, according to the Fox 4 report. "We believe that they thought they were on their face value valid, authentic documents."

In fact the reason for the raid in the first place was because the original complaint was against the employer for intentionally hiring undocumented workers in a pattern of behavior and practice to underreport payroll and intimidate workers out of benefits for work injuries.

An attorney that represented several injured workers at the plant over the years had made the complaint to the Division because there was a pattern of practice he noted - that the employer's hiring and management practices were intentionally done to minimize workers' compensation liabilities and abuse immigrant workers.

So 105 workers get arrested for immigration and documentation fraud under a workers' compensation statute, even though most did not file any injury claims, and the employer faces no retribution whatsoever from the law even though there is documented evidence that the company knew what it was doing and its insurance carrier went along with the plan in complicity.

Bowzer persecuted because his face is brown

According to an affidavit signed by Lt. Mark Fritz, a state insurance investigator, the case started with a complaint made by Wellington, Florida, attorney Michael Elstein last September.

Elstein warned "there are numerous unauthorized workers (from another country) who are employed at Fruit Dynamics." He said the company also operated as Incredible Fresh and Collier County Produce.

Fritz said Elstein told investigators that the employer knew the workers were unauthorized. He reported in the affidavit that Elstein represented clients who had filed workers' compensation claim. He identified Elstein as a "defense attorney," apparently not understanding workers' comp industry parlance.

"Defense Attorney Elstein reported that when an employee became injured, he/she was terminated most of the time and/or harassed," Fritz wrote in the affidavit. "The insurance carriers in turn would then attempt to suspend his/her benefits and claim he/she committed fraud by using a false Social Security number in connection with their workers' compensation claims."

Elstein told WorkCompCentral, "I got so tired of this particular employer. Over the past five or six years I'd represented at least 10 of their workers, and I decided I had to find a way put an end to this."

Elstein had the permission of his clients to make the initial report, but the investigators from the Division of Insurance Fraud didn't then, and haven't yet, pursued the employer even though there is overwhelming documentation filed along with the criminal affidavits that not only did the employer know what it was doing, but it's insurance company knew too.

In his affidavit, Fritz alleged that the company's workers' compensation carrier, Guarantee Insurance Co., showed Fruit Dynamics was underreporting its payroll and thereby reducing its premiums by nearly half.

Of 212 Fruit Dynamic workers checked by the Division of Insurance Fraud, investigators identified 171 workers who used a stolen Social Security number or another person's identity to seek and maintain employment at the company.

And yet, no charges against the company or its managers and owners?

This is the double standard that can not be tolerated. Say what you will about whether or not undocumented workers are deleterious or beneficial to the economy, the bottom line is that unscrupulous employers will take advantage of them if they think there is a financial advantage to do so.

That any state would seek to bar workers' compensation benefits to undocumented workers is just plain backwards thinking - fortunately some lawmakers in North Carolina, where just such an attempt was made this legislative session, are smart enough to know that, killing such language in House Bill 369 in committee.

WorkCompCentral columnist Peter Rousmaniere wrote last month that based on extrapolation of statistics, undocumented workers sustain one out of every 10 work injuries.

"This high volume is invisible to almost everyone except for adjusters, case managers, lawyers and others who work directly with injured workers and have learned their work and life patterns," Rousmaniere wrote.

Rousmaniere concludes, "James Baldwin, debating William Buckley at Cambridge University in 1965, described the legacy of slavery as the tragedy 'when one has absolute power over another person.' To the undocumented worker, her or his employer holds nearly absolute power over safety. A work injury could result in jail time and deportation. Neither the workers' compensation system or worksite safety are healthy when one tenth of injured workers are in a constant state of vulnerability."

This double standard must stop. It is lightly veiled discrimination based on race. The masters aren't prosecuted for their fraud and deceit, but the powerless workers are punished for their enslavement.

I thank people like Elstein who stand up for immigrants and their rights.

And the people of our government who are complicit in employer fraud should be taken to task: Atwater should be removed from office, state investigators and prosecutors who turn the blind eye should be fired.

How dare they abuse the confidence of The People.

In terms of racial equality, this country, unfortunately, has a very, very long way to go.

Time To Talk

Exploitation of immigrants

Recalling my defense attorney days, it seems that by far and away the vast majority of the claims I was referred involved undocumented workers.

Back then the use of someone else's Social Security Number was just a nuisance - background checks were unproductive, tracking for other injuries or claims was impossible.

Otherwise, for the most part, if someone was injured and the medical reports supported the claim, compensation was paid.

In the years that have passed since I actively practiced workers' compensation law, however, false identification and illegal immigration status have taken on much greater significance as employers and their carriers use (or abuse) immigration status to deny benefits or take advantage of fears and customs.

WorkCompCentral correspondent, Michael Whiteley, in this morning's news, explores the dangerous paradox of immigration and workers' compensation with an in-depth report on a growing problem affecting a huge part of the national economy.

It's mostly a faceless population - the National Employment Law Project reported last year that, as of March 2010, 8 million undocumented workers were living in the United States. They accounted for 5.2% of the U.S. labor force.

The Public Policy Institute of California estimated that illegal workers comprised up to half of the nation's farm workers as of 2010.

Citing studies by the Urban Center, the Pew Research Center and other sources, NELP reported that, as of 2004, two-thirds of documented workers earned less than twice the minimum wage – compared to one-third of all workers. The median household income of undocumented immigrants in 2007 was $36,000 – well below the $50,000 median household income for U.S.-born residents.

NELP reported that failure to report injuries by immigrant workers was "a serious problem" across low-wage industries because of language barriers and a fear of being disciplined or fired.

The U.S. Occupational Safety and Health Administration reported that Hispanic workers suffer a disproportionate number of workplace injuries and deaths. For instance, in New Jersey, 17% of that state's workers are of Hispanic origin, but accounted for 24% of workplace deaths in 2009.

Whiteley reviews numerous case anecdotes where undocumented workers suffer severe, debilitating injuries but get ensnared in the immigration system, and their lives, and the lives of their families, are ruined.

There is a vocal minority that claims that undocumented workers are taking jobs away from citizens, but I think that most people don't truly believe those claims - not with two-thirds of them earning less than the minimum wage doing back-breaking physical labor tending the nation's crops or building your next house...

WorkCompCentral columnist, Peter Rousmaniere, has been following immigration and its relationship to workers' compensation for years. In his latest column he writes:

"James Baldwin, debating William Buckley at Cambridge University in 1965, described the legacy of slavery as the tragedy of "when one has absolute power over another person." To the undocumented worker, her or his employer holds nearly absolute power over safety."

I get lots of mail and comments from injured workers criticizing workers' compensation as a non-responsive, discriminating system that fails to live up to expectations for prompt medical relief and adequate indemnification. These are from people who have a good command of the English language.

Imagine if those with limited language skills, afraid of deportation or worse, complained about workers' compensation and the tactics and exploitation of those less concerned with decent treatment and the dignity of human beings over the Almighty Dollar. I suspect my inbox would be a lot more full.

It's unfortunate that the defeat of U.S. House Majority Leader Eric Cantor, R-Virginia, last week is going to delay or divert the discussion on immigration reform.

Workers' compensation is supposed to be about providing for the health and welfare of people, all people, who get injured doing their jobs.

It's time to talk about whether we're really serious and committed to making that happen.

Carriers should not be so inclined to use false identity or illegal residency to deny or reduce benefits, but instead should be seeking expatriation of the employers who illegally hire undocumented workers and don't pay workers' compensation "tax" on them.

Law enforcement shouldn't be so vigilant in prosecuting the injured worker lacking legal immigrant status but rather should be seeking those at the root cause of the dilemma - the "employers" who seek unfair competitive advantage with undocumented labor.

And instead of deporting illegal aliens, we should instead seek to enforce criminal sanctions against those who exploit them, particularly those in the field of workers' compensation who prey upon the fears and lack of knowledge or education of the illegal population to use them for unscrupulous financial gain.

A Poor Man's Process

An interesting anecdote provides a glimpse into the connection between workers' compensation and immigration policy, and how workers' compensation is used as a backstop for medical care and dispute resolution.

A Northern California manufacturer told local media after filing for reorganization in bankruptcy court that its workers' compensation costs quadrupled after a U.S. Immigrations and Customs Enforcement audit forced it to lay off a third of its workers in 2011.

Pacific Steel in Berkeley, Calif., filed for Chapter 11 bankruptcy at the U.S. District Court in Oakland on March 10, according to KQED News. Many of the 200 workers who were forced to leave their jobs because of invalid Social Security numbers filed workers' compensation claims, the company told KQED, a National Public Radio affiliate.

Another media source says that the immigration enforcement action occurred in 2011, and that many of the 200 workers laid off had been at the foundry for 20 or even 30 years - obviously vested in American life, paying taxes, sending their children to local schools.

The company manufactures castings used mostly in commercial trucks and construction equipment and is described as the third largest foundry in the United States.

It listed workers' comp carrier Sentry Insurance in Milwaukee as one of its top 20 creditors, with an outstanding debt of $882,775.19, according to Pacific Steel's bankruptcy petition.

According to local news Berkeleyside, the firm's workers' compensation costs quadrupled following the immigration action and subsequent layoff.

Typically known as "plant closing" cases, a mass of workers gets laid off or displaced because of the closing of plant operations (though in this case it was lay offs due to immigration policy) and, having no re disincentive, the displaced workers seek indemnity to keep them going to the next job, and also treatment and remuneration for what ever they believe ailed them as a consequence of working at that plant.

At a foundry there are all sorts of potential exposures that could be claimed in the workers' compensation world: noise, fumes, toxic materials.

We could bemoan these filings as fraudulent - after all, why would workers wait until after they were relieved of duty to file injury claims?

Or we could criticize applicant attorneys, or physician practices, or any number of other professionals in the system for perpetuating mass filing of questionable claims.

We could criticize the United State's immigration policy as counter productive to economic growth by displacing workers that otherwise contribute to productivity.

Or we could just acknowledge that the workers' compensation system is possibly the only way an immigrant worker can get any "justice," demonstrating again how workers' compensation often ends up as the poor man's dispute resolution process.

And I wonder if that $882,775.19 owed Sentry Insurance would have been much, much less if the claimants were quickly, albeit perhaps not entirely "documented" or "legitimate," provided a settlement without the usual back and forth between attorneys and doctors.

If Benefits Provided, Protections Flow

New York's highest court on Thursday unanimously ruled that workers' compensation exclusivity can shield an employer from tort liability for an employee's workplace injury, even if it has hired undocumented workers.

And that result is completely just in my mind.

Some activists are upset that an employer of undocumented workers could not be sued in tort for injuries because they believe that providing the workers' compensation shield against tort liability creates an incentive for abusing workers who may be too timid or afraid to take corrective action because of their immigration status.

But obviously in this case the immigration status of the workers involved did not inhibit their request for, and receipt of, workers' compensation benefits. So if the remedy is available to the employee, the protections should also flow to the employer...

In New York Hospital Medical Center of Queens v. Microtech Contracting Corp., No. 1, Microtech Contracting was hired to do some demolition work in a basement room that housed an incinerator. A Microtech representative then hired Luis and Gerardo Lema to perform the work.

The Lemas are brothers, natives of Ecuador, were not legally employable in the United States at the time Microtech hired them.

Microtech supplied the Lemas with a sledge hammer and a chipping gun – essentially a small jackhammer – and put them to work. The vibrations from the chipping gun dislodged a metal chimney attached to the wall of the room, about 10 to 20 feet above the floor. The chimney toppled over on to the brothers, injuring them both.

The brothers made claims for, and received, workers' compensation benefits, from Microtech's insurance carrier. The Lemas then sued the hospital in tort. A supreme court judge granted summary judgment for the hospital on the issue of liability under Labor Law Sections 240(1) and 241(6).

The hospital then reached a settlement with the Lemas and subsequently filed suit against Microtech seeking contribution and indemnification.

Microtech moved to dismiss the complaint on the ground that the suit was barred by Workers' Compensation Law Section 11, the exclusive remedy provision of New York comp statutes.

Rejecting the hospital's argument that because the Lemas brothers were in the country illegally, that the contract of employment was illegal and thus not subject to workers' compensation exclusivity, the court said the question really was whether Microtech was entitled to the safe harbor in Section 11.

Concluding the answer was yes, the court acknowledged that the policy of the state was that wrong-doers should not be rewarded for such, but the court reasoned that these principles were not at issue because the court was not being asked to enforce or recognize rights arising from the illegal contract between Microtech and the Lemas.

"If the illegality of the employment contract does not defeat the employee's rights under an otherwise applicable state statute," the court reasoned, there was no reason why it should defeat an employer's rights under an otherwise applicable statute like Section 11.

A number of state courts have found that undocumented workers are entitled to income benefits under workers' compensation. The U.S. 5th Circuit Court of Appeals has also reached the same conclusion for indemnity benefits under the Longshore and Harbor Workers' Compensation Act.

A distinction is that many also say that because the workers can not legally be employed they can not avail themselves of return to work benefits such as vocational training since they can not thereafter legally obtain employment.

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There will be no publication on Monday in observance of President's Day. I will resume Tuesday.

Immigration, Thanksgiving & Comp

Immigration reform has been sidelined by the Affordable Care Act, Sequestration, and other congressional befuddlement and partisan fighting (and even infighting) in politics and the media, but there's no question that something will be done to change immigration laws sometime in the near future.

As we go into Thanksgiving week, where we celebrate the blessing of the harvest (i.e. hard work providing sustenance for living), it is particularly poignant that this tradition was brought to this country by immigrants (our forefathers) dating back as early as the 1600s.

The work of immigrants tilling the land, harvesting its riches.

They weren't illegal immigrants back then because there weren't too many laws regarding immigration.

And they weren't undocumented immigrants because they had documents from the mother country allowing them to traverse the world.

They were just immigrants seeking a better life than was available at the mother country and willing to work hard and sacrifice in order to make a new reality (okay there were some property disputes along the way with the native indians...).

Immigration and the rights of immigrant workers has been a workers' compensation issue for some time and one issue that seems to touch some emotions is whether or not undocumented workers, aka illegal immigrants, are entitled to workers' compensation benefits, and if so, what and how much.

The Iowa Supreme Court recently ruled that an undocumented worker is eligible to receive workers' compensation benefits bringing the state in line with the vast majority of states that recognize a worker's right to assert a comp claim regardless of his or her immigration status.

The case involved Pascuala Jimenez who legally entered the United States in 1991 with a visa that permitted her to stay for 10 years. She settled in West Liberty, Iowa.

Jimenez started working for Staff Management, a temporary employment agency, in 2001, the same year her visa expired. Staff Management sent her to work for Proctor & Gamble at its Iowa City factory.

I won't go into the details of her injury - suffice to say Jimenez experienced what was determined to be a compensable hernia injury, and then an exacerbation of that injury over the course of a couple years,

Jimenez underwent surgery in November 2007 and returned to work without restrictions, but she was unable to perform all of her job duties because of her pain.

Less than a month later, Staff Management terminated Jimenez because, the company said, it had discovered she did not have authorization to work in the United States.

The parties dispute why Jimenez was terminated as you might imagine - those arguments are largely irrelevant to whether or not a) an injury occurred, b) whether that injury was industrial, and c) whether Jimenez was entitled to workers' compensation benefits.

The bottom line is that Jimenez filed for benefits in 2009 when a second surgery was deemed necessary. At that time Staff Management argued that Jimenez was ineligible for benefits under the Iowa Workers’ Compensation Act because she was an undocumented worker and that the Iowa Workers' Compensation Act was superseded by the federal federal Immigration Reform and Control Act.

Staff Management lost all the way up the appellate chain.

Eventually the Supreme Court, in a decision by Justice David Wiggins, concluded that the Iowa Workers' Compensation Act had to include an undocumented worker in its definition of a covered "employee" since the act did not specifically list an undocumented worker as someone who would be excluded from coverage.

Wiggins also rejected Staff Management's argument that the IRCA should override Iowa's comp laws.

The IRCA makes it unlawful for employers to hire undocumented workers, or to knowingly continue to employ workers who become unauthorized.

Thus, Wiggins said, it was illegal for Staff Management to employ Jimenez. But, he said this did not mean that Staff Management's employment contract with Jimenez was illegal.

"The goal of the IRCA was to inhibit employment of undocumented workers and to punish the employers who offered jobs to these workers," does not to diminish the labor protection available to workers under state law, Wiggins explained. 

Since Iowa law requires a contract of service between the employer and employee for the employee to be covered by the Iowa Workers' Compensation Act, Wiggins reasoned that declaring an agreement between an undocumented worker and an employer invalid would "undermine the IRCA by encouraging employers to hire undocumented workers because the employers would not be liable under the Iowa Workers' Compensation Act for any injuries those workers sustained."

He added that it would also "undermine the purpose of the Iowa Workers’ Compensation Act to make statutory compensation available to employees when the employees sustain injuries as a result of the hazards of the business."

Thus, Wiggins said, public policy is served by recognizing a contract between an employer and an undocumented worker for purposes of coverage under the Iowa Workers' Compensation Act.

Wiggins went on to say that the payment of benefits to undocumented workers under the Iowa comp scheme did not undermine the IRCA because the receipt of benefits as compensation for a disability caused by a work-related injury does not provide an incentive for workers to work illegally, but merely serves to make an injured worker whole. 

Iowa reached the correct decision. To have ruled otherwise would permit employers to unscrupulously circumvent concepts of basic human dignity and social obligations - what we now celebrate as our harvest in modern Thanksgiving rituals.

It does not matter where one comes from - we have determined long ago that if one provides the service of labor to another there is a social obligation to ensure protection against the consequences of injury incurred in the course of such service.

For that I give thanks...

Rare Agreement in Comp

It seems that SB 863 and its aftermath is doing a bit more to bring the interests of injured workers and their employers closer together than previously thought.

The issue upon which there seems to be agreement concerns the certification of interpreters for medical appointments and the immediate effective date of regulations implementing the requirement - because the Division of Workers' Compensation had already completed the formal rule making process by its certificate of compliance filed with the Office of Administrative Law, the rules took effect immediately despite a request by DWC to delay the effective date to October.

Though interpreters could get "provisional certification" with agreement of the claims administrator, adjusters aren't always available to grant status and there isn't sufficient time to get formal certification from the two commissions authorized by the rules to provide certification.

The Certification Commission for Healthcare Interpreters says on its website that it can take 11 to 19 weeks from the time an interpreter applies to take its exam until the interpreter has the results of the test. The National Board of Certification for Medical Interpreters says it can take 12 to 18 weeks to complete the process.

So Assemblyman Roger Hernandez, D-West Covina, amended AB 1376 to say the DWC interpreter certification rules will take effect on March 1, 2014. Hernandez also declared his bill an emergency measure and added language saying, “In order to avoid jeopardizing injured workers’ access to medically necessary services, it is necessary that this bill take effect immediately.”

The bill as introduced would have transferred the authority for creating and maintaining the list of certified interpreters for administrative hearings from the Department of Human Resources to the Division of Workers’ Compensation beginning in 2018, which makes some sense in my mind since the interpreters will be providing services under the workers' compensation laws.

Gilbert Calhoun, president of the California Workers’ Compensation Interpreters Association, told WorkCompCentral he thinks the bill amendments are good.

Jesse Ceniceros, president of Voters Injured at Work, said he sponsored the amendments to the bill to head off the possibility that injured workers would be cut off from treatment because an interpreter wasn’t available.

Jason Schmelzer, a lobbyist for the California Coalition on Workers’ Compensation, told WorkCompCentral employers “gave the green light” after reviewing proposed amendment language before it was added to AB 1376.

And the California Chamber of Commerce lobbyist Jeremy Merz said the Chamber is aligned with CCWC.

Finally carriers seem on board too - Mark Sektnan, president of the Association of California Insurance Companies, agreed the amendments are necessary to give interpreters time to comply with the rules.

Imagine that - everyone on board for a change that seems to be in the best interests of injured workers with limited English skills; probably the single greatest sub-population that needs workers' compensation treatment and services.

AB 1376 is up for a third and final vote in the Senate, which can act on the bill at any time this week.

If the Senate passes the bill, it will go back to the Assembly, which must concur with the Senate amendments before the measure could be presented to Gov. Jerry Brown.

There are four days left to get this done as the Legislature adjourns Friday.

Survey Shows Work Comp Foreign to Immigrants

The New Hampshire Department of Health and Human Services (DHHS) reported that a recent survey of immigrants on occupational health and work safety showed that most of them never heard of workers' compensation.

In order to assess knowledge of workers’ compensation, participants were asked if someone in the U.S. ever told them that their medical bills would be paid by workers’ compensation insurance if they are hurt because of their work. If respondents answered yes, they were asked to write down who told them.

227 participants out of 366 (62%) were not aware of workers’ compensation. Only 76 individuals out of 126 who said yes to understanding workers’ compensation wrote who told them. Sources identified included supervisors, human resources, family members, friends, doctors, co-workers, teachers, and NH Coalition of Occupational Safety and Health (COSH) through safety training classes.

Of the 366 participants in the survey, 29 noted they had been injured at work.

Common body parts affected included hands, fingers, wrists, backs, knees, feet, elbows, and abdominal regions.

The majority of those injured on the job had been in the U.S. for either 4-6 years or 6+ years.

Out of those 29, 17 were lost time claims.

23 told their supervisors of their injuries. 4 did not report their injuries because they left the job due to the injuries, a finger cut was not considered "serious," one felt that if the injury had been reported "nothing would change," and one said they would be fired.

The survey reflects that the respondents felt that their jobs involved injurious work conditions more often than not, which would be reflective of the manual labor conditions one would expect immigrant labor to be performing.

Of these conditions, respondents felt more often than not that safety issues were known but not taken seriously.

But the overall experience of respondents is that there is generally good supervisor support and that "bad treatment" was almost never experienced.

The top three jobs reflected in the survey were factory/production, cleaning, and food service - in total representing 67% of all job responses.

Perhaps reflecting a shift in immigration patterns, 44% reported country of origin being Asia with other nationalities substantially less.

The sampling reflected 28% with some college education, and 32% graduating high school levels.

It's a small sampling so the study has its limitations - those are noted in the report. Nevertheless it is telling that even with a relatively educated immigrant working population, workers' compensation seems either misconstrued or suspect as a protection system.

The report is here.

Rx Testing the New Source for Regulation

The rapid rise in spending for drug testing over the past couple of years raises more questions than answers.

Yesterday the California Workers’ Compensation Institute (CWCI) released a report estimating that carriers and self-insured employers paid $98 million for drug testing in 2011, 192 times the $509,000 paid in 2004.

CWCI estimated total system costs for drug testing was $177.3 million over the past eight years, but $98.7 million of that was paid in 2011 and $51.4 million was paid in 2010. Spending on drug testing in 2011 accounted for about 2.5% of all system medical expenses that year.

Whats more, CWCI said that the average amount paid per date of service increased 315% to $147.55 in 2011 from $35.51 in 2004.

These results seem to point towards two trends that can be described using insurance vernacular: an increase in frequency (the amount of testing being done) and an increase in severity (the cost of each test).

Of course these are conclusions and what is driving both frequency and severity is an unknown, but there are calls for more regulation to provide guidance on when drug testing should take place and how much drug testing should cost.

Some will lay blame on testing labs because of evidence of impropriety, with allegations that drug testing labs have caught on to the opioid trend and are capitalizing on the situation.

In April, WorkCompCentral ran a story about drug testing labs accusing other labs of gaming the situation by inflating testing bills by up to 1500%, and by recoding or bundling services.

In addition labs and drug testing companies are alleged to provide doctors with marketing and promotional materials showing them how they can bill not just for a $20 point of care, but also for multiple office visits, patient consultations and preparing reports.

One possible contribution to the rise in drug testing frequency and severity in workers' compensation cases may be due to an increase in enforcement efforts against labs that are intentionally overbilling by the Centers for Medicare and Medicaid Services.

Prosecutors in Massachusetts announced in April that Calloway Laboratories agreed to pay $20 million to settle state charges that it defrauded Medicaid with a kickback scheme and excessive urine tests.

In February, the U.S. Attorney’s Office in Michigan announced that three labs in Troy, Mich., agreed to pay $6 million for improperly billing about $900 worth of urine drug tests for patients regardless of what the physician ordered.

In May 2011, Quest Diagnostics paid $241 million to settle a whistleblower lawsuit accusing it of overcharging Medi-Cal and paying kickbacks to doctors, hospitals and clinics that referred patients to its labs.

And in November 2010, Ameritox Ltd. agreed to pay $16.3 million to settle allegations that it made cash payments to physicians in exchange for referrals for drug-testing services.

So perhaps the increase in workers' compensation drug testing is the result of a shift by the labs from the Medicare system to the more fractured, less onerous, state workers' compensation systems with the myriad of 50 different sets of rules and regulations making it easier to hide.

Perhaps part of this meteoric rise in testing costs is due to pure profiteering. There certainly is evidence of this.

In March Dr. Gerald Pearlman accused his former employer, Accatur Diagnostics, of performing unnecessary tests to inflate bills and submitting invoices to payers using codes in the Official Medical Fee Schedule that are supposed to be used only by the laboratories that perform the tests, resulting in bills for tests that were between $1,000 and $3,000 when the cost of the testing was only $70.

I guess that this trend should be expected. The substantial increase in opioid cases around the country, in and out of workers' compensation systems, would result in increased testing. Capitalism being what it is, there is a natural tendency to take advantage of the situation while it still exists.

One thing is for certain, this too shall pass and the next cost driving trend will take its place - we just don't know what that will be ... yet.

In the meantime, prepare for increased regulation and rules adding yet more complexity and costs.

FEHA Case Involving Undocumented Worker Doesn't Smell Right

When it comes to undocumented workers and protection of employee rights I am one confused individual.

On the one hand, we have laws that are in place to level the playing field for both workers and employers - laws that mandate legal procedures be followed before one can work, or be hired for work, in the United States.

On the other hand, sometimes those laws conflict with basic human rights and their enforcement seems to be in conflict with their intended purposes.

In California we have the Fair Employment and Housing Act (FEHA) that says that an employer can not discriminate against those who claim disability on the job and must make "reasonable accommodation" for them, including a process that is vaguely described (more thoroughly by regulation) as the "interactive process."

It is the interactive process that trips up most employers that are subject to FEHA and subjects them to six digit liability and attorneys fees.

The Third District Court of Appeals (3rd DCA) in August of last year ruled for an employer, upholding summary judgment in Salas v. Sierra Chemical, because the employee did not refute evidence of illegal entry in the US - the reasoning was that if Salas was not legal to be employed in the US then any accommodation or process tied to accommodation under FEHA would be moot and essentially in violation of US immigration laws and policy.

The facts of the case are that Vicente Salas began working for Sierra Chemical in 2003. At that time he signed an employment eligibility verification form, where he wrote a Social Security number and provided a resident alien card that attested to his eligibility to work in the United States. Salas also signed a W-4 income tax statement, using the same Social Security number.

Salas hurt his back while stacking crates on Sierra's production line in 2006 and filed a claim for workers' compensation benefits. He was able to return to work, subject to medical restrictions, but was laid off that December.

In May 2007, Salas received a recall notice from Sierra, offering to reinstate him if he obtained a release authorizing him to return to full-duty status.

Salas then sued Sierra, alleging it had failed to reasonably accommodate his disability, in violation of FEHA and in retaliation for having pursued his workers' compensation claim.

During the discovery process, Sierra learned that the Social Security number Salas had provided was being used by a North Carolina man.

Based on this "after-acquired" evidence, Sierra argued Salas had obtained his job under false pretenses, and that it would not have recalled or hired him in the first place if it had been aware he had provided counterfeit Social Security information in the application process.

San Joaquin County Superior Court Judge Elizabeth Humphreys granted summary judgment in favor of Sierra, and the 3rd DCA unanimously affirmed.

The appellate court determined Salas had used a false Social Security number since he had not refuted the evidence produced by Sierra that the number belonged to a different person. This, the court reasoned, entitled Sierra to judgment as a matter of law since Salas was not eligible to hire in the first place.

The California Supreme Court granted review of the decision last November and the case is pending briefing by the parties.

WorkCompCentral interviewed the lawyers on both sides of the case.

Salas' lawyers argue that the 3rd DCA decision would give unscrupulous employers the "perverse incentive" to hire undocumented workers, so they can "do whatever they wanted" and "later say, 'Oh, they're undocumented,' and get off scot-free for discrimination."

They argue that affirming the 3rd DCA decision would be "to the detriment of all workers," since it would create a "race to the bottom," among employers. "If you have a legally exploitable class," they argue, "it lowers the floor for everybody" as to what employer conduct workers will be willing to tolerate.

The defense argues that Salas "had every opportunity to tell the trial court that he had his own Social Security number and he didn't do it," so "it's reasonable to infer from that he didn't have his own Social Security number."

They said that after Salas was laid-off from Sierra, he began working at another job "that was as heavy" as his former full-duty position. Then, "when Sierra called him up, he didn't tell them, 'Oh by the way, I have another job,'" and thereafter complained "he didn't get offered modified duty."

So where do I stand?

I don't like fibbers. Bottom line. And the fact that Salas didn't tell anyone that his SSN wasn't his, early on in both the FEHA process and in the litigation, tells me that Salas isn't an honest person. If it is correct that he got another job in the meantime and failed to tell Sierra about that is another blight on the honesty-meter.

I don't like that.

He should not be rewarded for dishonesty.

In my opinion the Supreme Court is dealing with a case of dirty facts, and if they decide to render an opinion other than a blanket denial of review then the law on FEHA rights for undocumented workers is going to be messy.

It seems to me that if one can not legally work in the United States because of immigration status then the FEHA interactive process and modified work obligations are moot - to what purpose are these provisions if the person to whom they apply can not actually utilize the benefits?

Though I have a big nose, it is unfortunately not very sensitive to smell.

But the Salas case doesn't smell right to me. That says a lot.

At least regarding this one case, I guess I'm not that confused.

We're Not Entirely Wacky in CA!

When I posted about the case of the Los Angeles firefighter that secured benefits for incurring an injury while trimming a wisteria plant at his home on Catalina Island the commentary was predictably negative, especially by those who love poking fun of us Californians because of our weather and free loving ways.

Well a Workers' Compensation Appeals Board (WCAB) Panel opinion that was handed down last month does show that we Californians aren't all wacky, and that sometimes logic is not impaired by our early January, clear and sunny, 80 degree days (why am I working???).

In Cubedo v. Leemar Enterprises the WCAB ruled that employers are not liable for temporary total disability benefits when an injured worker's ("applicant" in California work comp adjudication claims) immigration status is the sole reason for not being able to accept an offer of modified work.

Sarahi Cubedo, had suffered a back injury while working as a cashier for a restaurant owned by Leemar Enterprises. The employer had provided her with modified duty until a claims adjuster notified the employer that Cubedo had testified that she was an undocumented worker.

A workers' compensation judge awarded Cubedo temporary disability benefits, but a WCAB panel reversed and remanded the award.

WCAB Commissioner Frank Brass wrote that the TTD award was not consistent with the 2000 2nd District Court of Appeal decision of Del Taco v. WCAB.

In Del Taco, the court ruled that an applicant is not entitled to vocational rehabilitation benefits where the applicant's immigration status is the sole reason for being unable to return to work. The panel concluded that requiring the employer to provide vocational rehabilitation benefits would violate the equal protection clause under the 14th Amendment of the U.S. Constitution.

"With regard to temporary partial disability and pursuant to the holding in Del Taco, we believe that if defendant made a legitimate offer of modified work that applicant could not accept solely because of her residency status, defendant is not alternatively liable for temporary total disability benefits," Brass wrote. He clarified that Cubedo would be entitled to TD benefits if she could show that she was temporarily totally disabled because of medical reasons, and noted that this must be supported by substantial medical evidence. However, Brass and his fellow panelists felt that the evidentiary record was unclear at the time, and remanded for further proceedings.

The case was subsequently settled with Cubedo receiving no TTD benefits for the period of time she was unable to work because of her immigration status according to our report in WorkCompCentral news.

Cubedo is a logical result and confirms that California sunshine has not completely demented rational thought processes. Now, go back to your snow and freezing weather. I have recreation to pursue...