Warning for employers who misclassify employees or misrepresent the nature of work performed.
Insurance Journal is reporting that Liberty Mutual Insurance Co. has won a case against an employer who refused to pay an additional $3.64 million in workers’ compensation premiums. This dispute arose after a payroll audit showed more high risk employees than were originally claimed.
This is a fascinating article because it shows how insurance companies set premiums and what happens if a problem occurs. Our law firm currently represents a man who fell off a roof and is now paralyzed. The employer misrepresented the nature of its work and now the insurance company is refusing payment.
Michigan law requires employers to purchase workers’ compensation insurance. Premiums are typically based upon the number of employees and nature of work performed.
Some bad employers try to game the system. Premium fraud occurs when an employer intentionally under reports the number of its employees and/or does not accurately describe the type of work performed. Employee misclassification occurs when a company wrongly says a person is an independent contractor.
Sick and disabled people do not disappear when no insurance coverage exists. Government programs like Medicaid and Medicare end up with the tab. Private health insurance also pays resulting in higher costs for everyone.
Employers without insurance are still liable for payment of workers’ compensation benefits. Officers and directors of the company are personally liable.
Warning signs that an employer does not have valid insurance are a refusal to submit a claim and promises to pay benefits under the table. It is important to contact an experienced lawyer if the employer or insurance company refuses payment.
Michigan Workers Comp Lawyers never charges a fee to evaluate a potential case. Our law firm has represented injured and disabled workers exclusively for more than 35 years. Call (844) 201-9497 for a free consultation today.
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