Massachusetts Workers' Compensation Lawyer Blog

Employers who pay workers under the table or misclassify them as contractors make up a big part of the construction and trades industry, according to a forum held at Quinsigamond Community College in Worcester, Massachusetts. Worker and business representatives met with representatives from several state agencies to discuss the Underground Economy and Employee Misclassification.

The economic reality of employers hiring subcontractors who then subcontract to others or resort to illegal hiring practices makes it difficult for construction businesses to compete in the residential market, according to David S. Klein, president of an architectural metal and roofing contractor in Worcester.

In this underground economy, some companies pay construction workers in cash so that they can save on taxes, workers’ compensation insurance, and health insurance.

A Harvard University study conducted in 2004 estimated that about 125,725 Massachusetts workers (including over 7,000 construction workers) were misclassified as independent contractors between 2001 and 2003. The study also estimated that employers could be denying the state up to $91 million in workers’ compensation payments.

Skirting of state hiring laws focus of forum, Worcester Telegram & Gazette, September 23, 2008

Continue reading "Massachusetts Examines Under the Table Businesses " »

New Hampshire contractors say that misclassification of workers among their competition has forced them to seek business elsewhere in Massachusetts. They claim that it is almost impossible for them to land construction projects in their own state because their competitors illegally misclassify workers to avoid paying for workers’ compensation, cutting their costs by about a third and allowing them to offer lower bids.

Many of these contractors have banded together to share their concerns with their local representative. A join task force is also preparing to examine the business practices of contractors throughout the state and penalize those who misclassify workers to deny them workers’ compensation.

Independent contractors generally earn more per hour, but they are cheaper for the contractor to employ because they don’t require workers’ compensation coverage. This issue was recently brought to light when a local construction worker fell on a construction site and shattered the bones in his left foot. He was originally denied workers’ compensation money because he was classified as an independent contractor.

Contractors speak up on workers comp, Nashua Telegraph, August 19, 2008

Continue reading "Contractors Accused of Misclassifying Workers" »

Mark Lay, an investment advisor in Ohio, was sentenced to 12 years in prison following a loss of $216 million by Ohio’s agency for injured workers. The forty-five year old was the Chief Executive and Founder of MDL Capital Management, which is now defunct. Lay’s sentencing was the grand finale of a three year investigation into investment scandals at the Ohio Bureau for Workers’ Compensation.

The state of Ohio invested $225 million in a hedge fund Lay set up in Bermuda. The state lost all but $9 million. Lay reportedly borrowed against the fund, which caused almost $213 million of the $216-million loss.

Lay was convicted for investment advisory fraud, mail fraud and wire fraud. Prosecutors asserted that Lay concealed information from bureau staff and took unauthorized risks. He claimed that his poor investment choices were not a criminal offense.

U.S. District Court Judge David D. Dowd Jr. ordered Lay to pay restitution of more than $212.9 million. In addition, Lay must pay $590,526 in forfeiture.

If you were injured on the job and are not receiving the workers’ compensation you are owed, then contact our Massachusetts workers’ compensation lawyers. We are experienced in workers’ compensation, wrongful death, and related cases, so we can make sure you receive the medical treatment and financial compensation for your injuries.

Advisor gets 12 years in prison in Ohio investment scandal, Los Angeles Times, July 9, 2008

Finance exec gets 12 years in BWC fraud case, Business First of Columbus, July 8, 2008

Adviser gets 12 years in prison in Ohio fraud case, Associated Press, July 8, 2008

Massachusetts Secretary of Labor and Workforce Development Suzanne M. Bump announced last month that the state is launching a new EOLWD website and toll-free hotline, 1-877-96-LABOR, so that workers can report suspected workplace fraud activity. Attorney Michael Bradley, formerly of the Norfolk County District Attorney’s Office and the Plymouth County Sheriff’s Office, has been appointed Executive Director of the Joint Task Force to handle operational issues likes investigating tips from the hotline and website.

The goal of this new initiative is to reduce the “underground economy,” meaning employers who misclassify employees as independent contractors, do not have a workers’ compensation policy, or pay their employees in cash “off-the-books” to conceal their business activities from local and federal government. It is also aimed at claimants who collect unemployment insurance or workers’ compensation while they are actually working.

"Stamping out such fraud is a high priority of the Patrick Administration,” said Secretary Bump. "The hotline and website are ways to report wrongdoing so that we can restore fairness in our state's economy and help those who go to work each day to earn an honest day's wage.”

If you suffered from an injury or accident on the job and you’re not receiving the medical treatment and monetary compensation to which you are entitled, then we can help. Our Boston workers’ compensation attorneys can negotiate for the highest possible injury settlements and verdicts as well as protect clients from insurance companies or employers that want to cut off benefits.

A new hotline for workplace fraud debuts, Boston.com, May 20, 2008

Massachusetts Governor Patrick Administration Announces New Hotline, Website for Public to Report Workplace Fraud Activity, CompNewsNetwork, May 23, 2008

Related Web Resource

Joint Task Force on the Underground Economy and Employee Misclassification