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.


Supreme Court Affirms Disability Award For Employee With High-Frequency Hearing Loss

The Tennessee Supreme Court has ruled that an employee is entitled to the full amount of workers’ compensation benefits awarded to him by a trial court. In  2009, Orville Lambdin retired from Goodyear Tire & Rubber Company where he had worked as a tire builder for over 35 years. He later sought workers’ compensation benefits based upon his loss of hearing. At trial, ... (click for more)

Labor Market Is Focus Of Dalton State Business Newsletter

The status of the workforce and labor market statistics of the Northwest Georgia region is the focus of the newest issue of “Business Analytics,” a biannual publication of the Center for Economic Research and Entrepreneurship of Dalton State College’s School of Business. The newsletter, which is available both online and in print, contains an analysis of regional job growth ... (click for more)

Girl, 12, Stabs Boy, 13, Twice At Lookout Valley Middle High School

A female student stabbed a male student twice at Lookout Valley Middle High School on Thursday morning. It happened in a middle school classroom. Sheriff Jim Hammond the students are seventh graders.The girl is 12 and the boy 13. He  said the boy was taken by ambulance and went into surgery after the mid-morning stabbing.  He said the boy received a superficial ... (click for more)

Chief Fletcher Gives Maximum Punishment To Officer Who Fired At Vehicle That Backed Toward Him; Attorney Vows To Fight To Reverse Decision

Chattanooga Police Chief Fred Fletcher has given a maximum punishment to an officer who fired four shots toward a vehicle after he said the driver backed into his vehicle with him standing behind it. Chief Fletcher sustained a finding of “improper use of force – discharge of firearm.” He suspended Officer Alex Olson for 30 days without pay – the maximum suspension allowed ... (click for more)

Shelley Andrews Will Be Missed - And Response

Shelley Andrews was one of the kindest, most thoughtful and most effective laborers in our community.  Her work with the Friends of Moccasin Bend was exemplary.  She listened, she learned and she led with dignity and class. Her brave battle with ovarian cancer was a testament to her positive spirit and commitment to her work on behalf of the people of this region. ... (click for more)

Roy Exum: The Magic Bank Account

As the month of January is almost out the door, I am opening my email today to share a marvelous story that legend has it was printed on piece of paper found in Bear Bryant’s wallet when he died in 1983. While I don’t know that the famed Alabama football coach had this lesson in his wallet, chances are he might have if he’d read it. * * * THE BANK ACCOUNT & RULES Imagine ... (click for more)