A California attorney's office is charging a local contractor with several charges of workers' compensation fraud. The contractor who runs several construction companies, including a pool company, is facing most of the charges and has pleaded not guilty. He purportedly failed to report his pool construction employees on his workers' compensation policies so that he can lower his insurance premiums.
Among the white-collar crimes that the construction contractor is facing, one of the more serious charges is that of being dishonest in order to lower his workers' compensation insurance rates. He also failed to collect taxes on these employees. Surprisingly, the contractor could receive up to 16 years in prison if convicted.
The state of California's agencies and local groups are starting to crack down on contractors and other businesses. Many contractors attempt to cut corners when it comes to providing workers' compensation benefits to their employees. Sadly, the enforcers at the state level have reported that they have only just begun to catch some of this fraudulent activity, and only a fraction of these types of crimes have been actually been caught.
The trouble with dishonest contractors is that they are hurting legitimate companies in California, and in some cases, causing them to go out of business. Many professional organizations and lobbyists in California are calling for more reform when it comes to workers' compensation benefits for employees. The hard-working employees who do the actual contracting work deserve the workers' compensation benefits. They also have legal rights that must be respected when injuries occur on the job.
Source: Insurance Journal, "California Contractors Praise Charges Against Pool Company," Feb. 5, 2013