Labor Department Expands Efforts To Uncover Employer Fraud

Thursday, June 5, 2014

The Workers’ Compensation Division of the Tennessee Department of Labor & Workforce Development has put into place new procedures to identify employers who engage in payroll fraud such as intentionally misclassifying workers as independent contractors, failing to report all wages paid, misrepresenting the kind of work performed, or paying workers “under the table.” These practices are typically used to avoid paying workers’ compensation and unemployment insurance tax premiums. 

“We are working aggressively to stop misclassification fraud by employers. When these unethical practices are identified, the Division of Workers’ Compensation of the Department of Labor & Workforce Development will assess administrative penalties for misclassification as well as refer cases for prosecution,” said Administrator for Workers’ Compensation Abbie Hudgens. 

The Employee Misclassification Advisory Task Force made recommendations that led to legislation to improve the state’s efforts to reduce misclassification fraud. The Department of Labor entered into a settlement that assessed a penalty of more than $300,000 against a drywall contractor who materially understated his payroll to his insurance carrier. The settlement is the largest ever of the department’s Employee Misclassification Education and Enforcement Fund. 

The Employee Misclassification Advisory Task Force, created by the General Assembly in 2010, made recommendations that led to legislation to improve the state’s efforts to reduce misclassification fraud. 

The Task Force submitted three annual reports to the Legislature – the latest on January 30. The following are among actions taken by the department based on Task Force recommendations. 

§  Establish a referral process for possible criminal prosecution:

Workers’ Compensation has referred cases to the Tennessee Bureau of Investigation or the appropriate District Attorney General for any action deemed necessary under any applicable criminal law. 

§  Hire additional investigators:

Three investigators, one of whom is bilingual, have been hired under the legislation since July 2013.

 §  Procure fraud detection software:

The Workers’ Compensation Division is in the last phase of acquiring this software. 

§  Launch a public awareness initiative:

o    The Workers’ Compensation division began a speaking tour in the summer of 2013 in which representatives from the division and the Tennessee Department of Commerce and Insurance spoke at conferences and other venues across the state. These speakers continue to be available for future presentations.

o    The division created a Website that provides useful distinctions between employees and independent contractors.

o    The division offers a toll-free number, 800/332-2667, and a tip form, for citizens to report a business suspected of misclassifying its workers. 

Although the Employee Misclassification Advisory Task Force is scheduled to sunset on June 30, most of the current task force members have agreed to participate on a new Employee Misclassification Advisory Committee.


Customers Can Now Post Reviews On Better Business Bureau Website

The Better Business Bureau (BBB) of Chattanooga serving Southeast Tennessee and Northwest Georgia is launching a customer review service, a new platform for customers to voice favorable or unfavorable experiences they have had with local businesses. “For so many years consumers have asked the BBB for a way to praise businesses for admirable practices and service. Now BBB Customer ... (click for more)

State Supreme Court Adds Donation Option To Attorney Registrations

The  Tennessee Supreme Court will add a voluntary funding mechanism for attorneys to contribute to access to justice programs, but will not require attorneys to report pro bono hours under changes adopted today. In an order filed on Tuesday, the Court “ continues to encourage strongly voluntary reporting of pro bono participation.” Pro bono service refers to  attorneys ... (click for more)

Officials Expect MLK Boulevard Mural To Be Big Draw; Artist Apprentices To Be Hired For Project

Officials said Tuesday they expect a massive mural planned on a tall MLK Boulevard building by a renowned muralist will be a big draw for the area. City Councilman Moses Freeman said, "This is going to be a destination point. People are going to come here to see it. I guarantee it." He added, "She's world-renowned. We're going to be famous by having her work here." The ... (click for more)

Haslam Adds K-12 Funds In Budget Amendment

Tennessee Governor Bill Haslam on Tuesday unveiled additions to the FY 2015-2016 budget that will be considered by the General Assembly in the coming weeks, including added funding for K-12. The governor last week met with school superintendents from the largest systems in the state over the issue of state funding for K-12. The next day, the Hamilton County Schools joined ... (click for more)

Physicians Thank Their Patients On Doctor’s Day

March 30 has been set aside as National Doctors’ Day since 1933 as a time to recognize the contributions made by our physicians. While the recognition is appreciated, our greatest satisfaction comes from caring for our patients.  For 132 years, the Chattanooga-Hamilton County Medical Society has been the physicians’ voice as we worked together to improve health of our community. ... (click for more)

Roy Exum: Look At My April Garden

On this April Fool’s Day, as I take my monthly stroll through my virtual garden, there are gorgeous flowers and there are weeds, which appear to be trying harder than the flowers. So let’s see what we find before searching for “The Prize Egg” on Sunday. A FLOWER to the New York cab driver who told a young writer, “Always remember that everyone you meet knows something that you ... (click for more)