The State Board of Workers Compensation has already uncovered 538 businesses without a policy that resulted in $480,000 in fines and $1.2 million in premiums to cover their 2,700 employees since January.
Richard Thompson, chairman of the board, said Tuesday that greater reliance on computers is leading to more cases, more fines and greater numbers of employees eventually gaining protection because the four inspectors and four compliance officers stationed around the state can cover more territory.
“We’re able to be more efficient,” he said.
The agency used to rely on complaints and random inspections that required employers to show proof of coverage. After all, experience tells them that many restaurants, stores and small construction-trades companies are the most frequent violators, often claiming workers were independent contractors.
Now, the inspectors can instantly check a national database from their cars to see if a business is paying premiums for coverage.
With a few computer keystrokes, they can check out a dozen businesses in the time it would take for a physical inspection.
“That’s a time saver. We don’t have to waste our time going into the business. We’re more interested in knowing which businesses don’t have insurance,” said Stan Bexley, director of enforcement.
At year end, inspectors check former violators in the database to ensure that they haven’t dropped the coverage they were forced to buy when they were caught originally.
The agency also recently began cross checking data from the Department of Labor to seek employers who are paying unemployment-insurance premiums but don’t provide accident coverage. So far, that process has generated more false alarms than genuine violations, he said.
“Once we can narrow this list down, I feel like we will get more positive hits on the list,” he said.
The board would need a law change to begin combing state tax records. And it doesn’t often alert sister agencies in the state or federal government of the violators they turn up.
Still, many of the noncompliant companies find when they try to buy a worker’s comp policy that the insurance companies demand they develop legitimate records with those agencies.
A report released last week by the state’s Department of Audits & Accounts was mildly critical of the board for not having standard penalties for violations. The agency says it needs a law change to do that, and it prefers to give its administrative-law judges the discretion to set fines based on the facts of each case.
Overall, the audit concluded the enforcement division was on top of its job, but it offered suggestions.
“The division has limited resources available to enforce the state’s workers’ compensation laws; however, it still does not use the board’s claims data to focus on-site inspections on businesses that pose the greatest potential risk of injury nor to identify potential fraud cases,” the auditors wrote. “In addition, a formal policy has not been established regarding assessment of penalties.”