Investigating Workers Compensation Claims and Complying with Wage and Hour Law

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1 Investigating Workers Compensation Claims and Complying with Wage and Hour Law Noel C. Shepard Adam R. Hanley

2 Investigating Workers Compensation Claims

3 Conducting a Proper Investigation Why is an investigation so important? Ensure key information is gathered Identify red flags and combat possible fraud Determine cause and prevent future accidents

4 Accident Investigation Check List: Ensure Key Information is Gathered Do a complete and thorough investigation as soon as possible to ensure key information is gathered Go to the accident site immediately, if possible Secure the scene of the accident to preserve evidence Take photographs of the site and any involved equipment Take measurements and diagram the accident area Secure any video surveillance of the accident area or alleged incident from onsite cameras, if available Recreate the scene if concerned that the injury could not have occurred as described. Video the reconstruction.

5 Accident Investigation Check List: Identify and interview the witnesses ASAP Talk to those witnesses the injured employee said were there Talk to those in the area where the incident occurred Talk to injured employee s supervisor Interview privately, if possible, to help with openness and avoid group versions of the incident Ask what and how it happened Ask when and where it happened Ask who was present Do this as soon as practical memories fade and stories can change once everyone hears other versions

6 Accident Investigation Check List: Obtain written statement from the witnesses Have witnesses sign statements and get them notarized, if possible Attribute statements to correct source - Joe said x,y,z. Be careful - if investigation report says x,y,z happened, employee's attorney will argue the employer admits and accepts that as what happened. If report says Joe reported x,y,z, then there is no admission by the employer. Extremely important in intentional tort and additional safety violation (VSSR violation of specific safety requirement) setting. If there are no witnesses to the accident, document that fact Determine who said there were no witnesses Such documentation could potentially eliminate a person who later claims he/she witnessed the incident If the incident occurred as alleged would there have been a witness?

7 Accident Investigation Check List: Determine what the injured employee claims happened Is there some discrepancy in the story? Make sure the discrepancy is documented Find out what the injured employee told other employees Make sure the responses are documented Observe how the injured employee looks Document the results Is the employee is pain? How does the employee walk? Are the employee s movements exaggerated? Do not say he hurt his back he reported that he injured his back. Determine if the injured employee has had prior similar complaints Document any evidence of prior-related injuries

8 Accident Investigation Check List: Determine if the injured employee has other jobs or any hobbies that could impact the development of the conditions Does the employee have a second job or does the employee run a side business? What recreational activities does the injured employee engage in? What type of house repairs and yard work does the injured employee do? Ask witnesses and co-workers what they know.

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11 Tips For Effective Accident Investigation: Keep out opinions Do not think this is a "good" or "bad" employee Do not determine what you think happened Do not speculate Stick to the facts - what you or witnesses saw or heard

12 Tips For Effective Accident Investigation: Look for red flags Date, time, place of accident are unknown or injured employee cannot recall specifics Report of injury delayed or not filed timely The timing of the alleged accident seems suspicious Did the alleged accident occur near the end of a probationary period, after a weekend or holiday, after a denied request for scheduled time off, etc.? Documents have areas crossed-out, erased, or appear altered. Physician s portion revised or supplemented without any initials to confirm who revised the document. Alleged injury is inconsistent with the nature of the business; report references, materials, equipment, etc. the employee would not typically use or are not present in work area.

13 Tips For Effective Accident Investigation: Red flags continued: Conflicting descriptions of the alleged accident between injured employee and witnesses or what was reported in the incident report and what was reported to the treating physicians There are no witnesses to the alleged accident The injured employee files for benefits in a state other than his or her principal location The injured employee cannot be reached or moves either out of state or out of the country after filing the claim The alleged accident occurs prior to impending plant closure, layoff, strike, disciplinary action, job completion, job termination, etc. Tips received from co-workers regarding suspicious behavior Immediate representation by an attorney or similar attorney/doctor combinations to other injured employees

14 Red flags: What next? Check social media Facebook Twitter Surveillance by a Private Investigator Video Written report Independent Medical Exams & Reviews

15 Prevention: Determine the cause and prevent future accidents Was there a defect, hazard, unusual condition that lead to the alleged accident? Was weather a factor in the alleged accident? Were there environmental factors that contributed to the alleged accident? For example stairs, ladders, equipment, machinery, furniture, carpeting, walkways, sidewalks, vehicles, etc. Depending on the cause, determine if a similar future accident can be avoided Tell employee how to work more safely! This is not an option, following the safety rules and best practices is a required part of employee s job They can and should be disciplined for not following safety work rules

16 Best Employment Practices: Employee relations considerations If the facts show that the injury is work-related, then you will want to do all you can to assist the employee in his or her recovery. If there is a delay, an otherwise good employee may become a disgruntled employee. If the cause of the accident is determined and it can be fixed, then fix it. Quick action reduces or eliminates costs of future accidents and injuries Quick action reduces the potential of VSSR and intentional tort actions being filed against the company If an employee complains that a condition is unsafe: Investigate the complaint Get back to the employee with a response Always look for conditions that may be unsafe

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19 Reporting Recommendations: Prompt reporting of claims The sooner a claim is reported, the sooner you, your TPA, the MCO, the BWC, or your insurance carrier can begin assigning resources and managing the claim. The sooner a claim is reported, the sooner you can begin the accident investigation.

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21 Any questions? Noel Shepard

22 Complying with Wage and Hour Law

23 OVERVIEW Background and Threats Correctly Classifying Employees FLSA Requirements FLSA Exemptions Recordkeeping Labor Department Audits

24 DANGER AHEAD Over 50,000 FLSA Suits filed nationwide since 2000 The trend continues upward Both individual claims and collective actions Time-consuming litigation Claims under the FLSA have surpassed the number of race and gender class actions in recent years

25 WHAT S THE BIG DEAL? U.S. Department of Labor Wage & Hour Division U.S. DOL hired over 350 new investigators Now trained and experienced True Believers! We Can Help & Community Outreach DOL/ABA Bridge to Justice Program There s an app for that

26 GETTING TO KNOW YOUR EMPLOYEES Major DOL initiative: Misclassification Contract Labor, Contract Employees, Freelancers, Independent Contractors Economic Realities test: Is the worker dependent on the alleged employer for his/her livelihood? Increased government agency coordination

27 WHAT S THE FLSA REQUIRE? Minimum Wage Time-and-a-half for Overtime Recordkeeping Limitations on Employment of Minors Non-exempt employees may be hourly, salaried, commissioned, paid via day rate or piece rate, etc., but these requirements still apply

28 OVERTIME Must pay non-exempt employees 1.5 times regular rate for hours over 40 per 7-day workweek There s no such thing as comp time for private employers! Regular rate is all remuneration for employment divided by all hours worked Includes bonuses, commissions, incentives, etc. Most deductions can t cut into overtime

29 EXEMPTIONS Unless exempt, employees must be paid overtime White Collar exemptions Executive, Administrative, Professional, Computer Professional, Outside Sales, Highly Compensated Employee Burden is on employer to show exempt status Must meet detailed criteria based on reality Exemptions relate to individuals, not job descriptions

30 RULES FOR EXEMPT EMPLOYEES Must receive predetermined amount of pay each week in which any work is performed Deductions are limited: Whole days missed for personal reasons Whole days missed due to sickness or injury if company has a sick pay policy Bookend weeks of employment Failure to comply = Exempt Status Lost

31 EXEMPTION: EXECUTIVE EMPLOYEES Main work must involve managing a recognized department of the business Must customarily and regularly direct the work of two or more other full-time employees (or their equivalent) Must receive a guaranteed salary of $ a week

32 EXEMPTION: ADMINISTRATIVE EMPLOYEES Main work must involve office or non-manual work directly related to management policies or general business operations Work must include exercise of discretion and independent judgment about matters of significance Must receive a guaranteed salary of $ a week

33 EXEMPTION: PROFESSIONAL EMPLOYEES Main work must require advanced knowledge, invention, imagination, or talent in a recognized artistic field E.g., applying highly specialized knowledge in computer systems analysis, programming, and software engineering Must receive a guaranteed salary of $ a week

34 FLSA RECORD KEEPING Essential for defense Must be retained for three years Must keep: Name, address, DOB Sex and occupation Work week and pay period covered Basis of payment, regular rate, hours worked Straight pay, OT pay, deductions, total wages

35 DOL AUDITS Look back two years Cover all FLSA compliance areas Investigator s goal: future compliance + back pay Your goal: Buy time, evaluate, plan strategy

36 AN OUNCE OF PREVENTION Be sure that you have it right! Review your pay policies and practices Quickly consider what to do to correct problems Be careful about how to implement changes Compliance doesn t necessarily mean higher costs

37 Any questions? Adam Hanley