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Small Employers “Duped” by a Workers Comp Insurance Giant

When an insurance company’s policies are banned in three states due to its deceptive business practices, you know something isn’t right. When small businesses in a fourth state accuse them of operating a “reverse Ponzi scheme”, you might think we’re talking about small-time crooks on their way out of business – maybe even on their way to prison.

Well, think again. The insurance company in question, Berkshire Applied Underwriters, isn’t a fringe outfit – it’s a division of billionaire Warren Buffett’s massive Berkshire Hathaway Corp. And the stock-market bulletin The Street reassures us that Berkshire’s stock is still a “Buy” despite its little Workers Comp problem.

In June, California’s insurance commissioner found Berkshire had duped a small employer, Shasta Linen, while dodging required state review of its rates. Berkshire was forced to stop selling these policies in California. Regulators in Wisconsin and Vermont had already issued similar crackdowns.

Now a New York bicycle messenger firm, Breakaway Courier, has accused Berkshire of making insured businesses cover each others’ losses in what the courier called a “reverse Ponzi scheme.” According to Breakaway’s complaint: ponzi-scheme

[C]ompanies are led to believe their premiums are being paid into “protected cells” and will eventually be returned to them. Instead, Berkshire Hathaway illegally siphons off premiums, leaving employers and injured workers without the funds that New York State requires to be available to cover losses.

Berkshire is still selling workers’ comp insurance in Illinois, among other states. Our Governor, Bruce Rauner, and major corporations in the Illinois Chamber of Commerce never tire of complaining that benefits for injured workers are a drag on the state’s economy. Perhaps they ought to take a look at the insurance companies instead.

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Update: Trump Taj Mahal Closing Amid Strike

Dubbed as the “eighth wonder of the world” by former owner, Donald Trump, the Trump Taj Mahal Casino is officially set to close its doors after Labor Day. The casino, owned by Carl Icahn and managed by Tropicana Entertainment, has been under the radar for the massive UniteHere workers’ strike that began on July 1, 2016. trump

The Taj failed to reach a compromise during negotiations with Union Leaders throughout the strike. Now, the workers who were fighting for equal health care, benefits, and pay similar to that of other casinos owned by Tropicana, can’t help but wonder if the closing was done completely out of spite. Reps from the management company state that “Currently, the Taj is losing multimillions a month, and now with this strike, we see no path for profitability.” However, UniteHere officials state that the extra benefits their workers were seeking would only have cost a few million dollars.

Losses from the closure will include nearly 3,000 jobs at the Taj, adding to the already 8,000 positions that have been eliminated in the Atlantic City area due to multiple other casino closures in the last three years. Not only are laborers hurting from this blow, but the city itself is nearing the verge of bankruptcy due to decreased economic movement and tax revenue.

Elfenbaum, Evers & Amarilio is saddened by this oppression of union efforts and rights to protest, and we are hopeful that the displaced workers are able to find new employment.

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Drastic Increases to Employer Penalty Fees by OSHA

As of August 1, 2016, OSHA’s maximum penalty fees for employers who violate code will be increasing by 78%. oshaThe penalty increases may even affect inspections that date back to November of 2015 if the violation citations are issued after August 1, 2016.

The top penalty for serious violations will change from $7,000 to $12,471. The maximum penalty for willful or repeat violations will rise from $70,000 to $124,709. Employers can also expect more frequent visits from OSHA inspectors, especially if they’re in industries that were typically less-frequently targeted than others. Other policies being implemented onto employers by OSHA include: electronic recordkeeping of employee illnesses or injuries, necessity to report a single employee hospitalization, and a Whistleblowers Severe Violators Protection Program which places “bad” employers in a program where their other locations and practices are maintained under close watch.

Most notably for employees, OSHA’s Electronic Recordkeeping Rule, effective August 1, 2016 as well, will outlaw the following employer practices because they may discourage employees from reporting on-the-job injuries.
• Maintaining incentive programs which reward employees for experiencing no recordable workplace injuries and illnesses; and
• Maintaining rules requiring disciplining employees who do not immediately report workplace injuries; and
• Automatically conducting post-accident drug testing of injured employees.

Here at EE&A we care about employee safety and workers’ rights.

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Corporate Math: How Many Workers is One CEO Worth?

About 1,000, according to pharmaceutical conglomerate McKesson Corp., that is.

In March, McKesson announced it would be dismissing 1,600 U.S. workers in a decision expected to cost the company nearly $300 million, mostly consisting of severance payments. Who is one person they will be keeping around? CEO John Hammergren, a man with a salary of over $130 million and a projected 5-year compensation of $280 million. If he were to be terminated, Hammergren’s single severance package would total to $187 million, valuing his departure to that of about 1,000 employee jobsmckesson.

The CEO’s severance includes a $114 million pension, life security, cash bonuses, life-long financial counseling, and more. The International Brotherhood of Teamsters, the union to which McKesson employees are member to, is far from pleased by this “golden-parachute ratio,” as coined by Bloomberg.

In fact, Ken Hall, general secretary-treasurer of Teamsters has gone as far as to comment that this ratio is “yet further evidence that McKesson is being run first and foremost for Hammergren, with shareholders, employees and customers left far behind.” The emotional and financial impact of 1,000 workers and their families losing income sources cannot be solely reduced to a dollar value.

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Postal Workers Give New Union Contract Their Stamp of Approval

Over 200,000 U.S. Postal Service employees began the week of July 11, 2016 in good spirits, as the American Postal Workers Union (APWU) just concluded negotiation on a two-year contract. Their workers can expect pay raises, continued COLAs, and job security among other fortified benefits.
Career employees are locked in to receive an overall 3.8% raise given in three installments by 2018. Their current COLA agreement will also remain. As for postal support employees, they will receive larger raises, approximately 5% in total at the same schedule as career employees, due to the fact that COLAs do not apply to them. Additionally, support employees will be given $0.50 hourly wage raises in 3 installments by 2018.

The new contract also included no lay-off provisions, prevention of subcontracting USPS driving work, as well as promises to not consolidate or close any plants prior to April 2017.

Maintenance and motor vehicle support employees were converted to career employee status. The only caveat that APWU was not able to negotiate around was an increase in payment of health insurance premiums by employees.

We at Elfenbaum, Evers & Amarilio support workers’ unions and their continuous fight for employee rights.

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Trump Taj Mahal Casino Strikers Persevere Onward

Nearly 1,000 cooks, housekeepers, serves, and bellmen from the Trump Taj Mahal Casino in Atlantic City went on strike on July 1, 2016 just before one of the busiest weekends of the year for the company. Though the popular casino bears presumptive Republican nominee Donald Trump’s name, it no longer has any affiliation with the tycoon. Instead, it is owned by magnate Carl Icahn, a businessman with a net worth surpassing 20 billion dollars.

And what are his employees asking for? A living wage.

The strikers, all members of Unite Here Local 54, are battling for decent pay, fair labor, and reasonable healthcare benefits. Upon his takeover of the Taj, Icahn extracted hundreds of millions of dollars from the company to drive it to the point of bankruptcy, stripping workers of health benefits and financial security in the process.

The facts? trump taj mahal strike

Half of the workers at Trump Taj Mahal rely on government subsidized healthcare like Medicare, Medicaid or the Affordable Care Act. One third have no insurance at all.

Meanwhile, workers at other casinos in the area, also owned by Icahn, have settled contracts with full health benefits. Taj workers are being told to accept a deal that provides them with only part of the insurance extended to other casino workers by Monday, July 18th or lose it entirely.

This issue is only the tip of the iceberg. Costs of living in Atlantic City have increased nearly 25% in the last 10-15 years, while workers have only seen up to $0.80 in raises over that time. The average employee pay stands at $12/hr.

While workloads continue to build for dedicated employees who have stuck by the Taj during its financial troubles, pay remains at standstill, benefits plummet, and employee concerns for their futures and families only climb higher and higher.

As Noelle DiSomma, a protesting employee of Taj puts it, “Whereas these jobs were middle-class, now they’re the working poor.”

At EEA, we fight for workers’ rights.

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Workers’ Comp 101: Do “mental injuries” count?

The short answer to this question? It depends.

Mental or psychological injuries can definitely be job-related, and can be just as disabling as a broken leg or torn tendon. However, not all mental injuries are covered – and proving your case can be challenging. mental injury

Benefits are most commonly awarded for two types of mental injuries:

1) Sudden, intense psychological stress due to a traumatic event: Examples would include being the victim of a robbery at work, being assaulted or threatened by a customer, or witnessing an accident where someone else is killed or seriously injured. The incident must be something that would shock or upset the average person, and must be over and above the “normal” or expected stresses of your job. Threats or harassment from coworkers may count, but only if they’re related to the job rather than a personal conflict.

2) Psychological stress caused by a physical injury: Chronic pain and physical disability can lead to depression, anxiety and other problems. So can the stresses of losing a job that provided income and a sense of self-worth. If a mental health professional clearly links your problem to your work injury, you are entitled to benefits and medical treatment just as you would be for physical symptoms.

Physical symptoms caused by severe psychological stress can also be compensable, if there is a clear connection. However, mental problems related to “routine” job stressors such as a heavy workload or a demanding boss are not considered compensable in Illinois.

In the end, these types of claims are very fact-specific. So call EE&A for a free consultation if you have questions about your case!

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Workers Comp 101: The facts about drug testing

If you suffer an injury at work, you are more likely than ever to be tested for drugs and alcohol. (Some of our clients tell us they were forced to pee in a cup even before being offered first aid!) Recent changes to Illinois workers’ comp laws have made it easier for employers to use drug tests to challenge claims.

This does NOT mean that a positive test kills your right to care and compensation! It does mean that you need to know your rights. drugtest

A few tips:

1. Don’t refuse a drug test. Current law allows your refusal to take the test to be used as proof of “intoxication.”
2. Remember: “illegal drugs” includes any drug that you don’t have a doctor’s prescription to take – including legal narcotic painkillers, sleep aids or stimulants. Borrowing meds from family and friends can be risky in more ways than one.
3. Do make a list of any drugs you took in the past few days. A wide variety of medicines (and even foods) can produce “false positives” on a urine drug screen, including the ones listed here.
4. Do get an attorney at once if you get a positive test! Even if the employer fires you, you may still have the right to medical care and compensation – but you will need expert advice.
In general, you can’t be denied benefits in Illinois unless your alcohol or drug use was the “proximate cause” of your accident. (It doesn’t have to be the only cause, but your boss must be able to make a case that the accident likely would not have happened if you hadn’t been under the influence.) They can also deny benefits if they can show you were so intoxicated that you were “outside the scope of your employment” – essentially playing hookey while still on the job.

Call EE&A at (312) 226-2650 for a free consultation and advice on defending your rights.

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Verizon Strikers Appeal for Solidarity Nationwide

We’d like to pass along a bulletin we got this morning from the Working Families Party, on behalf of 40,000 Verizon workers on the East Coast who walked out on strike this morning. Please see below:

40,000 Verizon workers just went on strike this morning. Verizon strikers

From Massachusetts to Virginia, this will be the largest workers’ strike in recent years. And if they’re going to win a fair contract, they’re going to need you standing with them in solidarity.

On Monday night, Bernie Sanders visited Verizon workers in Buffalo, New York and pledged his support and solidarity for the strike. Will you? Join us and Bernie to support the Verizon strike by signing our solidarity petition. Click here.

Why the strike? Because Verizon workers have been trying for 10 months to win a fair contract from their CEO. Verizon made $1.8 billion in profits just since January 1st, but instead of providing benefits to their hardworking employees, they want to cut job security, outsource positions overseas and keep wages stagnant.

10 months is a long time for talking. Now it’s time to picket!
We can win, but only by standing together.

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Not An Accident

Celeste Monforton and her team at the Pump Handle Blog have been running a series of articles on workplace deaths. It makes for grim reading. But perhaps the most important thing is the title:


“An ‘accident’ suggests the circumstances were unforeseen or could not have been avoided,” they explain. That’s not the case with too many workplace fatalities that could have been avoided by purchasing or fixing a few simple pieces of equipment – or slowing down the rush for production for five or ten minutes.

Two of the latest tragedies in this series: In September 2015, Terry Leon Lakey, 51, was crushed to death by a hydraulic aerial lift he was servicing. His employer, Terex Services of Waco, Texas, was cited for three serious violations by OSHA for their ineffective lockout/tagout policies. The fine? A whopping $21,000. Not an accident

And just last week, Robert Derkacs, 45, and Joseph Donahue, 25, were killed at a construction site in Hanover, New Jersey. The township’s mayor told reporters that “a 10,000-pound generator was being hoisted by a crane, when a strap gave way.” Or it could have been two straps, according to CBS. Of the five construction contractors on the site, at least three have been cited for serious safety violations since 2010. The top fine was $2,625.00.

Our thanks to Dr. Monforton and the Pump Handle team for telling it like it is. We’d just add that there’s one other excuse companies should not be allowed to make: “It Was The Contractor’s Fault.” General contractors are responsible for work injuries to their own employees, no matter whose equipment or staff were responsible. And companies who employ subcontractors without workers’ comp coverage can be held responsible for those employees, too.

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