A light hearted look at my adventures as the head of safety and risk management for a company that serves the entire staffing industry from temps to contract staffing to Professional Employer Organizations.
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I just want to take a minute to say "Hello" and "Thank You" to all the people who follow my blog.
I appreciate any and all feedback that you send me. If you have a topic in mind you would like to see me post on, please do not hesitate to contact me. If you have a critique, suggestion, criticism, question, or just like what you read, please let me know.
I read your comments (so please feel free to leave comments) and try to remove any spam or inappropriate, unrelated content from them. I do NOT remove any criticisms or corrections.
You can not offend me, but are welcome to try.
I know from emails that I have received that I have people from the PEO/staffing industry, safety people, and (safety) students following me. I also have former clients who visit my site for topic ideas for their safety meetings.
I would just like to say 4 things about this blog: First is that I have a good sense of humor, and it comes through in my blog. Even though I take a less-than-serious point of view, these are VERY serious topics. I am also seriously committed to safety. I moe my grass with PPE every time. I use safety glasses, sun screen and a hat, gloves, ear muffs, and closed toe shoes.
The topics can get very boring with numbers, standards, legal citations, etc. I try to make it fun and easily understandable for the average person. I take the following approach to safety:
“Never memorize something that you can look up.” ― Albert Einstein. ["Recording the Experience" (10 June 2004) at The Library of Congress]
I don't want workers to memorize the height of a safety rail, mid rail, or toeboard, I want them to look and say "There should be a safety rail here," OR "That safety rail is too low." Then they can look up the correct measurements.
The second thing about my blog is I will speak the TRUTH. "Brutal Honesty" (as my one friend calls it) is a better description. I don't always agree with OSHA, I have strong (personal) views on Constitutional Rights, I believe in God, etc. I will state what is my beliefs when that is what they are.
I am committed to safety, but sometimes good intentions get in the way ("The OSHA Cowboy"). You will always know where I stand, and when I am wrong, I will take full responsibility.
Third, this blog is about more than just safety and the staffing industry, it is about external factors that affect both. Things such as technology (see my post: Safety and Technology). What I like about the Staffing Industry is the scope and variety. One day I can be dealing with manufacturing issues, the next transportation. Perhaps it is the ADHD, but I like the fact that it never gets boring. That is also reflected in my blog.
Finally, the goal of this blog is to get you to THINK!
Thank you for reading this post and this blog. Please feel free to tell others about it as well.
Note: This is Part 1 in a 2 part post. Chronologically it is posted second, but that is because of how blogspot.com displays posts.
On with the post...
SAN DIEGO — Prosecutors secured a conviction and a conviction and jail sentence for a South African man and his daughter in a workers' comp fraud case that had been running for over a decade and that cost insurers more than $1.5 million. In the end it was coincidental that the fraud was discovered at all.
This story is a real a lesson for employers in how carriers might better manage claims, for brokers in why frequent case reviews are so important and for safety/risk managers why it is so important to be involved with claims.
In 2002, Kohrumel was working as a manager at a local Staples office supply store for three months when a heavy box fell on her foot, breaking a toe. She filed a workers' comp claim. Surgery on the toe ensued a couple months later.
This is where it gets interesting and the red flags should have gone up...
She claimed she couldn't use the crutches the hospital provided after the surgery so the carrier, American International Group (AIG) through its third-party administrator ESIS (part of the ACE Group), provided Kohrumel with a wheelchair. But the wheelchair allegedly gave her carpal tunnel syndrome so they provided an electric wheelchair. Yes, state records indicate a claim for a wrist injury, as well as her back, on what was originally a claim for a broken toe.
Kohrumel claimed hypersensitivity in her feet following the surgery, complex regional pain syndrome, depression and anxiety. She was put on a cocktail of over two dozen prescription medications.
She never returned to her job and was paid temporary disability amounting to two-thirds of her salary, tax free. Given her age, the payments could have totaled several million dollars.
Starting in 2004, she also represented herself as needing around-the- clock care, which was provided by her husband until his death two years ago. At that point Anton Buitendag, her father took over.
Recently, Kohrumel and her father began demanding that he be reimbursed for the constant care that they claimed he provided. Buitendag was seeking $324,000 in compensation for his claimed work from September 2011 through June of this year. He claimed his services were worth more than $21 an hour, which came to about $500 per day, or roughly $182,000 a year.
The insurance company, ESIS/AIG, disputed the amount of care Kohrumel needed and asserted that it could not legally pay Buitendag because he was a foreigner without a U.S. work visa. Kohrumel’s attorney sought to litigate the issue before the Workers Compensation Appeals Board.
It appears from lien filings and other documents that Philip Cohen in San Diego was her attorney. Her doctors appear to be Kristi A. Dove MD, a neurology and pain management specialist and Elise Reed, DO a psychiatrist. Other lien claimants include pharmacy providers, a sleep testing center, copy services, and a large health system.
The case might have gone all the way to settlement if Kohrumel hadn't demanded to be moved to a larger place. She said needed a larger place to live, as her two-bedroom apartment was not large enough for her wheelchair to navigate. Ace/ESIS hired some movers (as Kohrumel was wheelchair-bound) and that's when the fraud was exposed.
While helping Kohrumel, the movers noticed that she would get out of her wheelchair for extended periods, then lift and move heavy boxes in her garage. They reported what they saw to the insurance company and later videotaped her standing for about two hours while hefting, moving and sorting through boxes in her garage.
The movers informed ESIS of what they had seen and on their next visit the administrator obtained sub rosa video of Kohrumel again standing and moving boxes for an extended period of time.
Investigators served a search warrant on Korhumel’s garage and recovered more than 20 boxes of unused prescription medications issued to Kohrumel dating back to 2007. Prosecutors say they used this as evidence to extend the grand theft allegations back to Jan. 1, 2007.
Before Kohrumel was ever hired by Staples she had over a dozen knee surgeries for preexisting conditions that could be adding to her current level of disability. Prosecutors harbor doubts as to whether there was ever an industrial accident at all, but say they opted to file charges only on what they were sure they could prove if it went to trial.
Kohrumel pleaded guilty to eight felony counts, including insurance fraud, preparing a false document, perjury and grand theft. Buitendag pleaded guilty to three felony counts, including attempted grand theft.
Superior Court Judge Duane Moring ordered Anton Buitendag, 65, to serve 180 days in local custody and handed down a year-long term to 35-year-old Yolandi Kohrumel. She will also have to repay the $1,558,653 she received in temporary disability (TD) benefits over the life of the case.
Prosecutors say the toe injury case had a potential exposure of $8 to $10 million as it was headed towards a life pension and a likely award of lifetime 24-hour care. Kohrumel is only 35 years old so the financial implications of any lifetime award would be amplified by her relatively young age. As it is millions have already been spent on a case that prosecutor’s say may very well have no industrial connection to her employer at the time.
What can I say...
I just dealt with a similar situation, and I had all types of evidence, still the courts took a "wait and see approach." This was with a judge that was known to be "fair" with employers.
Remember, judges will ALWAYS favor the employEE. Even in the face of blatant fraud they will take a "wait and see approach."
The main reason for this is that the courts want to "err on the side of caution." This is a legacy of the events that brought about Work Comp and "exclusive remedy."
Note: This is Part 2 in a 2 part post. Chronologically it is posted first, but that is because of how blogspot.com displays posts.
On with the post...
The modern system of workers' compensation is so complex and arcane it produces considerable grief to those who must deal with it on a daily basis. Yet these often cumbersome regulations are so ultimately vital to society they appear, in one form or another, in all industrialized nations.
Work Comp in Antiquity:
The history of compensation for bodily injury begins shortly after the advent of written history itself. The Nippur Tablet No. 3191 from ancient Sumeria outlines the law of Ur-Nammu, king of the city-state of Ur. It dates to approximately 2050 B.C. The law of Ur provided monetary compensation for specific injury to workers' body parts, including fractures. Hammurabi's Code (1750 B.C.) provided a similar set of rewards for specific injuries and their implied permanent impairments. Hammurabi was an ancient king of Babylon.
Ancient Greek, Roman, Arab, and Chinese law provided sets of compensation schedules, with precise payments for the loss of a body part. For example, under ancient Arab law, loss of a joint of the thumb was worth one-half the value of a finger. The loss of a penis was compensated by the amount of length lost, and the value an ear was based on its surface area.
All the early compensation schemes consisted of "schedules" such as this; specific injuries determined specific rewards. The concept of an "impairment" (the loss of function of a body part) separate from a "disability" (the loss of the ability to perform specific tasks or jobs) had not yet arisen.
The Middle Ages:
Yet the compensation schedules of antiquity were gradually replaced as feudalism of the Middle Ages gradually became the primary structure of government. The often arbitrary benevolence of the feudal lord determined what, if any, injuries garnered recompense. The concept of compensation for the worker was bound up in the doctrine of noblesse oblige; an honorable lord would care for his injured serf.
The development of English common law in the late Middle Ages and Renaissance provided a legal framework that persisted into the early Industrial Revolution across Europe and America. Three critical principles gradually developed which determined what injuries were compensable. They were generally so restrictive they became known as the "unholy trinity of defenses.
1. Contributory negligence.
If the worker was in any way responsible for his injury, the doctrine of contributory negligence held the employer was not at fault. Regardless of how hazardous the exposed machinery of the day was, any worker who slipped and lost an arm or leg was not entitled to any compensation. This was established in the United States through the case of Martin v. the Wabash Railroad, in which a freight conductor fell off his train. Although inspectors subsequently blamed a loose handrail, his injuries did not receive compensation because inspecting the train for faulty equipment was one of his job duties.
2. The "fellow servant" rule.
Under the "fellow servant" rule, employers were not held liable if the worker's injuries resulted in any part from the action or negligence of a fellow employee. This was established in Britain through the case of Priestly v. Fowler in 1837, a case of an injured butcher boy. In America, precedent was provided five years later by Farnwell v. The Boston and Worcester Railroad Company.
3. The "assumption of risk."
The doctrine of "assumption of risk" was exceptionally far-reaching. It held simply that employees know of the hazards of any particular job when they sign their contracts. Therefore, by agreeing to work in a position they assume any inherent risk it carries. Employers were required to provide such safety measures as were considered appropriate in the industry as a whole. In the 19th century, this often left a great deal to be desired. Assumption of risk was often formalized at the beginning of an employee's tenure; many industries required contracts in which workers abdicated their right to sue for injury. These became known as the "worker's right to die," or "death contracts."
While these common law principles were quite restrictive, it was their method of enforcement that proved most cumbersome. An injured worker's only recourse was through the use of torts. In the 19th century as in our own, these were exceptionally expensive legal affairs. Most countries required considerable fees simply to file a personal injury lawsuit. These more often than not were beyond the limited means of the injured worker. It was so uncommon for a working man to win compensation for injury that private organizations such as the English "Friendly Societies" and German "Krankenkassen" were formed that offered more affluent laborers the option of buying various kinds of disability insurance. Nevertheless, the worker did occasionally prevail through tort legislation. As the century wore on, this began to happen frequently enough that employers too became uncomfortable with the capricious nature and high cost of battling civil suits.
The First Modern Workers' Compensation Law:
The watershed events in the development of modern workers' compensation law occurred in the improbable setting of Prussia (now modern day Germany) under the even more improbable leadership of its stern Chancellor, Otto von Bismarck. The Chancellor was certainly no great humanitarian, but he was the force behind Realpolitik, the school of political pragmatism. Germany at the time had a very active Marxist and socialist movement, and social protection for workers was at the top of their agenda. The active left was a considerable thorn in Bismarck's side, particularly given his need for a stable home front while pursuing foreign empire-building. He resorted to straightforward political oppression, and in 1875, he outlawed the Social Democratic Party.
But Bismarck was shrewd. While suppressing the institutions of his socialist opponents, he maintained the loyalty of the common Prussian by co-opting key features of their agenda. The most important of these was a system of social insurance. His first foray into the field was through the Employers' Liability Law of 1871, providing limited social protection to workers in certain factories, quarries, railroads, and mines.
Later, and far more importantly, Bismarck pushed through Workers' Accident Insurance in 1884 creating the first modern system of workers' compensation. This was followed over the next few years by Public Pension Insurance providing a stipend for workers incapacitated due to non-job related illnesses and Public Aid providing a safety net for those who were never able to work due to disability.
The system as a whole valued the active worker; the greatest benefits were granted to job-related injuries and medical care and rehabilitation were covered. The state-administered Prussian system also established an important precedent: it was regarded as an "exclusive remedy" to the problem of workers' compensation, employers under the system could not be sued through the civil courts by employees.
The Prussian system has served as a basic model for the social insurance programs of a variety of countries including the United States. It is worth noting that the complex nature of modern workers' compensation law has been present almost from the start. Indeed, the dark writings of Franz Kafka were partly inspired by his job as a minor functionary in the arcane machinery of the workers' compensation board in (then Prussian) Prague just after the turn of the century
Workers' Compensation Spreads:
Other western nations gradually began to accept the notion that modern industrial society required some form of mandated workers' insurance. As early as 1880, the British Prime Minister William Gladstone pushed through the Employer's Liability Act. This abolished the old common-law defenses in theory, but it did not establish a "no-fault" system. A proof of negligence on the part of the employer was necessary for the employee to collect. Most importantly, "right to die" contracts in which workers renounce their right to sue for injury were still legal and widely used by English industry. Thus, the 1880 law had little effect.
The Workers' Compensation Act was proposed in Parliament in 1893 and was largely equivalent to the 1884 Prussian law in establishing a "no-fault" doctrine of compensation. Unlike the German model, it did not fully rely on state administration. Instead the "Friendly Societies" which had organized various forms of private disability insurance for workers for many years were relied upon to provide the insurance itself.
Nevertheless, the Act encountered staunch opposition from manufacturing interests in Parliament, and the House of Lords delayed its passage by attempts to add language which would have made "right to die" contracts a permissible means of circumventing the entire system. Finally, the Act was passed in 1897 after a four-year legislative struggle.
Workers' Compensation in the United States:
The winds of change were slower across the Atlantic. Populist sentiment for organized workers movements began to grow in the first decade of the 20th century. Social change was heralded by the literary "muck-rakers" movement, a group of authors who, while often uninspired in their literary craftsmanship, passionately wrote about the plight of the common man in modern industrial society.
Most famous among these was Upton Sinclair, socialist author of The Jungle, a novel detailing the horrors experienced by a Lithuanian immigrant working in the Chicago slaughterhouses.
Critical acclaim was lacking. A Time Magazine critic once said of him, "Of the many millions of words Sinclair wrote, few are the right ones in the right order." Despite his limited skills, The Jungle proved immensely popular, full of compelling and graphic passages such as:
"(The fertilizer workers') particular trouble was that they fell into the vats; and when they were fished out, there was never enough of them to be worth exhibiting, - sometimes they would be overlooked for days, till all but the bones of them had gone out to the world as Durham's Pure Leaf Lard!"
Mr. Sinclair's immediate goals were not realized. In the short term, the swell of public opinion in the book's wake led not to legislation aimed at improving workers' conditions, but to the Food and Drug Act of 1906 and the Meat Inspection Act of 1906, both primary milestones in the evolution of the Civil War-era Bureau of Chemistry into the modern Food and Drug Administration.
Nevertheless, a reform-minded public did gradually come to demand changes in workers' benefits. As early as 1893, the Department of Labor prepared a report by J. G. Brooks on the topic Compulsory Insurance in Germany. Congress passed the Employers' Liability Acts of 1906 and 1908, softening the common-law doctrine of contributory negligence. Failed or limited efforts to pass comprehensive workers' compensation acts were attempted in New York (1898), Maryland (1902), Massachusetts (1908), and Montana (1909). At the federal level, sentiment for modern workers' compensation ranged a few years ahead of the state legislatures, but the matter was generally considered best left to the states. The federal government did regulate interstate commerce, however, and what is arguably the first compensation system in America was proposed by President Taft and put into law in 1908 to cover those workers involved in interstate trade.
Unlike Europe, the decentralized nature of labor regulation in the United States provided a key additional obstacle delaying implementation of the laws. As in England, many manufacturers were ready for change provided it included tort relief, but they strongly objected to state-by-state regulation. It would, they appropriately argued, create an uneven playing field for unregulated competitors in neighboring jurisdictions. In the most telling example, phosphorus match manufacturers brazenly testified before Congress that, despite the widespread problem of "phossy jaw" poisoning in their workers, they were unwilling to invest in alternative compounds unless the law in all states mandated it. In 1910, this problem led to a special conference in Chicago attended by representatives of the industrial states to outline a uniform set of guidelines for compensation law.
The first comprehensive workers' compensation law was finally passed shortly thereafter in Wisconsin in 1911. Nine other states passed regulations that year, followed by thirty-six others before the decade was out. The final state to pass workers' compensation legislation was Mississippi in 1948.
The response of the medical community was lukewarm at best, particularly from the young but subspecialty of orthopedics. The noted shoulder specialist Codman decried workers' compensation statutes with their regulated physicians' fees as part of "the great effort which the majority is making to socialize the medical profession." To put his views in some perspective, he also objected to public parks, mass transit, municipal piers, regulation of interstate commerce, and even public hospitals.
The attitudes of medical professionals changed dramatically in the 1930's, however, when Social Security Disability Insurance was created to insure those who could not work due to infirmities that were not work-related. This vast expansion of the need for physician involvement and evaluation proved very lucrative. The American Medical Association quickly published the popular Guides to the Evaluation of Permanent Impairment, which has been through multiple editions since. As managed care has come to play a greater role in the health care system, many physicians have come to realize that compensation evaluations represent a stable and high-paying source of income.
Structure of the U.S. Workers' Compensation System
The various workers' compensation statutes in America are all modeled loosely after the original Prussian system. The central tenet is that of "no-fault" insurance; industrial accidents are accepted as a fact of life and the system exists to deal with their financial consequences in as expeditious a manner as possible. Employers participating in the system have the notable benefit of tort exemption for injuries covered by workers' compensation. Employees can sue third parties who may be responsible for their on-the-job injuries, but any proceeds from such suits must first go to reimburse their employer's compensation insurance carrier.
All American workers' compensation schemes are fully employer-funded either by the purchase of commercial insurance or setting up a self-insurance account. In their original form, however, most state compensation acts made employer participation "optional." Because they also often precluded the use of the common-law defenses if participation was declined, the vast majority of employers have historically participated, and approximately 80% of the work force is currently covered under compensation schemes. Most states have exclusion criteria for small firms and, most significantly, for domestic and agricultural workers.
As a general rule, claims are handled by legislatively created state compensation boards, although decisions can be appealed to the state court system. In five exceptions, Wyoming, Tennessee, New Mexico, Alabama, and Louisiana, claims are taken directly to the courts, but special state agencies exist to assist the processing of claims. The definition of compensable injury has gradually evolved over the years. Although it was once interpreted to mean a sudden industrial accident, in recent years most states have added language to include occupational exposures and overuse syndromes. The Kentucky law currently defines "injury" as "any work-related harmful change in the human condition.
A distinction is made between "impairment," a medical definition of the degree of loss of anatomy or function of a body part or system, and "disability," a legal definition of the degree to which an employee's impairment limits his ability to perform work. Some states due continue to have "schedules" for certain injuries, however, which directly correlate the loss of certain anatomical parts to amounts of compensation. For instance, the loss of a thumb in South Dakota entitles the worker to fifty weeks of compensation regardless of his disability6.
In general, compensation is paid both in the form of wage-replacement (usually at about two-thirds salary) for the period of total disability and in the form of lump-sum payments for any residual permanent partial disability. Employers also must pay for the workers' medical and rehabilitation costs. Many employers quite aggressively pursue rehabilitation and pay for services such as work-hardening programs that are not required by the letter of the law. They have found these to be highly cost-effective given that the outcome if the worker fails to return to work could be permanent total disability payments for life.
One special case that most states have now come to recognize is that of the "second injury." In Oklahoma in the 1920's, a one-eyed worker lost his remaining eye in an industrial accident. His employer was forced by the compensation board to pay not for the loss of a single eye, but for total permanent disability given the patient's blindness. Immediately, virtually all the one-eyed, one-armed, and one-legged workers in the state were deemed by their employers to represent unnecessary risks and were fired. To solve this dilemma, most states have now created "second injury funds" run by the government which all the private insurers pay into. These are used to make up the difference when a second injury proves incapacitating only because of a prior injury to another body part. Although their cost is relatively minimal and they initially appear to be a minor detail, second injury funds are absolutely critical in maintaining the employability of amputees.
Modernization of the U.S. Workers' Compensation System:
The basic structure of the American workers' compensation system has remained unchanged throughout the century and is, overall, a success in the eyes of employers and employees alike. Only in the last five years have major changes in the landscape of workers' compensation law begun to appear.
The primary instrument of change has been the Americans With Disabilities Act of 1990, one of the central pieces of legislation to emerge from the Bush Administration. The ADA actually represents a dramatic expansion of a much earlier law, Section 504 of the Rehabilitation Act of 1973. Section 504 required government programs, contractors, and any entity receiving federal funding to make their facilities accessible to the handicapped. Its language was relatively restrictive, and the law applied only when persons were excluded from a program or employment "solely" because of their disability.
The ADA was the result of a massive campaign to improve the employability of the disabled in America. It met with resounding legislative success; there were only 6 no votes in the Senate and 28 in the House. Unlike Section 504, the ADA encompasses all of the American workplace, not just that fraction associated with the federal government. It also contains language that allows much broader judicial freedom in interpretation.
The ADA requires that employers make "reasonable accommodation" for workers with disabilities, but no legal standards for the definition of "reasonable" are provided. A precedent does exist for accommodating workers' with special needs: a series of rulings has mandated that employers need accommodate employees religious wishes (Sabbath day off, wearing of religious clothing, etc.) only if the cost is minimal and the accommodation would not significantly disrupt the central business enterprise. Some state disability laws placed specific monetary caps on the amount employers could be required to spend to accommodate individual workers. By avoiding this kind of more specific language, many employers fear the ADA has created an environment in which the costs of employing disabled workers are highly unpredictable8.
The new law is fuzzy, too, in its definition of disability. Traditional government policy toward the disabled focused on three groups: the legally blind (numbering 400,000), the deaf (numbering 1.7 million), and the absolute wheelchair-bound (numbering 720,000). From these relatively small numbers, to reach the commonly cited figure that one-in-six Americans (approximately 43 million) are disabled requires the inclusion of a large number of less immobilizing physical impairments and mental disabilities. Indeed, mental illness alone creates significant confusion. The DSM as first published contained just over 100 disorders; it now contains three times that number.
For the employer, simply knowing whether or not a potential employee has a disability is often difficult. The ADA severely restricts employers' access to prior medical records before an offer of employment is made. Incidentally, these provisions have been successfully used by physicians to prevent state medical boards and hospitals from obtaining records indicating prior drug or alcohol addiction.
These gray areas of the ADA have been used by entrepreneurial lawyers to apply the law to areas removed from its original intended scope. Relatively few suits under the ADA have related to hiring discrimination. A substantial number allege discrimination against those who are already employed, and many allege disabilities acquired on the job. Thus, by a subtle shift in wording and emphasis, the ADA is seen by some lawyers as an opportunity to circumvent or augment the settlements their clients would reach through traditional workers' compensation. The most commonly cited disability in employment-related suits filed under the ADA is back pain (19% of the total), followed by compressive neuropathy and similar neurologic disorders (12%), and mental illness (12%). Only 8% of complaints have come from the wheelchair-bound and 3% from the deaf or blind8.
In one celebrated Texas case, a worker for the Santa Fe Railroad was awarded a $305,000 workers' compensation settlement for permanent total disability based on physicians' testimony that he would never be able to work again after his work-related back injury. Eight days after his settlement, he filed suit under the ADA claiming he was wrongfully terminated due to a disability and should be rehired with accommodation. Although the case was thrown out, this apparent legal double jeopardy highlights the legitimate fear of employers that the tort relief that is such a central feature of workers' compensation law is in danger of slowly being eroded.
Massachusetts historically has had a low rate of workplace-related injury compared to neighboring states and the national average. It also has one of the lowest workers’ compensation reimbursement schedules. One estimate suggests that physicians in Massachusetts are paid up to 40% less than the national average for treating workers’ compensation claims.
Prior to the passage of the Health Care Reform Act, more than 20 times as many emergency department (ED) visits were billed to workers’ compensation as were inpatient visits—an annual average of 85,000 ED visits versus 3,500 inpatient visits. After reform, the number of ED visits dropped by 7.2%.
Beginning in 2005, workplace claim rates steadily declined, according to a study by the RAND Corp. Between 2005 and 2009, claims dropped 16.7%, and workers’ compensation hospital costs dropped between 5% and 10%. Several factors—some of which may be related to the 2006 Health Care Reform Act—contributed to these decreases.
Research has found a significant association between being insured and the frequency of workers’ compensation claims. Patients who incur a workplace-related injury are more likely to file a claim with their newly acquired and mandated insurance rather than make a workers’ compensation claim. Thus, the number of workers’ compensation claims declined 4% after reform. Among patients who were identified as “high-cost” because they had conditions that historically placed a greater burden on insurance, the number of workers’ compensation claims declined by 6%.
One direct change resulting from PPACA is the Black Lung Benefits Act, which will facilitate the filing of claims and obtaining of benefits for coal workers who are injured. Understanding other changes to workers’ compensation under PPACA, however, is largely speculative at this point and depends on a variety of factors. These factors include specific cost shifts in the system, the success of coverage expansions, and benefits changes enacted under the law.
Some predictions can be made, however, in supporting the opposing notions that workers’ compensation costs may either increase or decrease by using Massachusetts as an example and considering that the Massachusetts Health Care Reform Act and PPACA share many similar provisions.
Some studies have shown that working Americans who lack insurance are more likely to seek coverage under workers’ compensation statutes. The decrease in the number of uninsured Americans could prompt cost shifts—reducing costs in the workers’ compensation system as more Americans use their normal health insurance to cover injuries stemming from work—similar to those seen in Massachusetts.
Furthermore, increasing access to care under PPACA and expanding preventive services and wellness initiatives should make the overall working population healthier. This could potentially decrease both the prevalence of comorbidities such as smoking, diabetes, and obesity and the number of workers’ compensation claims.
Fraud can also be decreased by potentially deterring uninsured employees from using workers’ compensation for nonoccupational injuries or preexisting conditions because the individual mandate requires enrollment in a health insurance plan. Therefore, treatment of these conditions will not drain workers’ compensation resources. Further trickle-down effects from tax rebates to the pharmaceutical industry will allow greater access to generic drugs for patients, which may enable these patients to treat their preexisting conditions without needing to use the workers’ compensation system for care.
In addition, although workers’ compensation insurers historically have provided higher reimbursements than Medicare, some states couple their workers’ compensation fee schedules to Medicare’s. Lowering Medicare fee schedules may affect reimbursements under workers’ compensation insurance, resulting in limiting coverage payouts.
With shifts to global payment systems and greater regulations on premium increases, workers’ compensation costs may decrease if pilot programs enacted under PPACA spill over into the workers’ compensation sector. Finally, increased coordination of benefits and new reporting standards called for under PPACA may affect workers’ compensation as well, decreasing costs by reducing administrative and overhead spending.
On the other hand, however, PPACA could increase workers’ compensation costs over time. For example, PPACA may strain primary care services, resulting in longer wait times for treatment for patients with occupational injuries. Changes in the supply of available physicians in certain disciplines—such as a projected shortage of primary care physicians—may make it more difficult for occupationally injured workers to find an available physician. This may adversely increase workers’ compensation costs by increasing the time spent away from work as employees wait to see a physician.
With a reduction in Medicare (and in some states Medicaid) reimbursement for surgeries, imaging, and other procedures, providers may seek to deliver more services to work comp patients to make up for lost income. Thus we may see more surgeries and related hospital/facility care, more scans, more tests and injections and implants and pumps. This will lead to more expense for comp payers, and will likely be a reduction in the quality of care: delivering services that are not needed, even if they are performed at a high standard, reduces the overall quality of care.
Most economists agree that PPACA will likely increase insurance costs nationally, and because the workers’ compensation system does not include copayments or deductibles and employers must bear these costs, the influx of patients in the workers’ compensation system may increase.
Obamacare & Trends in WC: Dispute Resolution
Mediation is a time-honored method of resolving disputed claims—and workers’ compensation is no stranger to its use. However, the frequency with which it has been exercised, and the degree to which adjudicative bodies have deferred decision-making and instead required parties to submit to alternate dispute resolution methodologies, has exploded in recent years.
Of course mediation allows the parties to participate in how their case will be resolved, rather than turning over the entire decision-making process to another. A mediation session provides adequate time to narrow issues, focus the parties on the strengths and weaknesses of their particular claims, and develop options for resolution. One of mediation’s most crucial contributions is bringing about the psychological framework to allow a claim to be resolved, rather than drawing more lines in the sand of sometimes intractable litigation. Significant savings in terms of time as well as expense can be appreciated through the mediation (rather than litigation) process.
Michigan provides an example of the new momentum that mediation has gained throughout the nation as particularly applicable in workers’ compensation matters. Recently enacted legislation in that state—in December 2011, to be specific—requires that all claims filed with the agency administering such claims “shall be set for mediation or hearing, as applicable,” and further that “if the agency or the Michigan administrative hearing system determines that a case may be resolved by mediation, the case may be mediated by the parties (and) if the matter is not resolved by the mediation, the case shall be set for hearing.”
Similarly, North Carolina’s Industrial Commission has since the adoption of automatic referral procedures in 1996-97 sent an Order for Mediated Settlement Conference to all parties with the acknowledgement of the claim’s filing. Montana similarly has a Mediation Unit within its Workers’ Compensation Claims Assistance Bureau, which provides a mandatory alternate method to resolve disputed claims prior to involving the Workers’ Compensation Court.
Georgia, on the other hand, has a dedicated “Alternate Dispute Resolution Unit” under the state’s Workers’ Compensation Board, charged with resolving certain types of disputes without the necessity of a formal hearing. Such issues include requests for change of physician, disputes about payment of medical bills, what constitutes “suitable employment” in compensable claims, disputes regarding attorneys’ fees, average weekly wage disputes, and determining the amount of permanent partial disability benefits payable.
California may, in fact, be the most aggressive jurisdiction of all when it comes to the use of alternate dispute resolution mechanisms. In the Golden State, the workers’ compensation system has become so overloaded that labor and management have been authorized to and have agreed to use a far-reaching and encompassing process to bypass the adjudicative system. As designed, the new ADR initiative will be achieved by using provisions of California Labor Code section 3201.7 and other relevant laws to establish a Labor-Management Trust; employer safety groups injury and accident prevention; an exclusive list of medical providers, evaluators, vocational rehabilitation and retraining programs; and an exclusive list of other providers, including ambulance, radiology, hospitals, inpatient and outpatient facilities, and other vendors that are needed to effectively implement the program.
Obamacare & Trends in WC: Immigration Laws
Alabama joined South Carolina and Arizona on September 1, 2011, by adopting new immigration laws some media outlets have described as “the most hateful piece of immigration legislation ever crafted,” prompting attacks by both religious groups and the U.S. Department of Justice. The impact of these laws on workers’ compensation systems will be significant, and go to such fundamental issues as whether there can even be an employer/employee relationship between an undocumented worker and his putative employer, and whether an undocumented worker can contract with an attorney for legal representation in his claim or even enter into a compromise settlement of his claim. The arguments for and against such laws essentially boil down to whether one believes that strengthening immigration laws to exclude illegal workers from entitlement to benefits would incentivize employers to hire illegal immigrant workers, if doing so would avoid the risk of workers’ compensation liability.
An exemplar case for this line of reasoning was the South Carolina Supreme Court’s decision in the case of Curiel v. Environmental Management Services, 655 S.E.2d 482 (2007), which held an illegal immigrant worker was entitled to workers’ compensation benefits, because to hold otherwise “would mean unscrupulous employers could hire undocumented workers without the burden of insuring them, a consequence that would encourage rather than discourage the hiring of illegal workers.”
Various challenges to these newly adopted state immigration laws are presently winding their way through the court system. No one at this point can necessarily predict the ultimate outcome. It is clear, however, that the present administration in Washington has made this issue a priority in this election year.
It is obvious that the world (as we knew it) no longer exists. But is the new reality a better place, or merely a different one? Only time will tell, but one thing is for certain: We have not seen the last of these changes to our practice environment. Only those practitioners able and willing to adapt to change are destined to succeed and prosper in its wake.
OK, unless this is your first time reading my blog, you know my sense of humor. You also know that I use it to deal with VERY SERIOUS subjects. This is no exception.
Most strippers are considered independent contractors. I think that too many articles, blogs, etc. dealing with independent contractors, mostly deal with construction. The truth is that many industries do the same: lawyers, computer coders, TPAs, and so on. This recent article is not meant to marginalize any profession, in fact it does just the opposite. Strippers are just as much entitled to workers' comp as any other employee.
There are many reasons that companies classify workers as independent contractors. The main reason seems to be to save on workers' comp. There is a famous case at Microsoft where independent contractors sued to be recognized as employees to participate in Microsoft's 401k.
Tops in Bottoms firm hit with workers’ comp penalty
Tuesday, July 30, 2013
By
Steven Cook
Gazette Reporter
GLENVILLE — A Glenville company that
offers strippers and exotic dancers for adult parties has run afoul of
the state over workers’ compensation.
Tops in Bottoms Entertainment, based on Ballston Road in Glenville,
was recently fined by the state Workers Compensation Board for failing
to provide workers’ compensation insurance for its employees, including
the dancers, during a six-month period from August 2011 to early 2012.
The number of employees at Tops in Bottoms that needed coverage was
not available, but the state board requires workers’ compensation
coverage for any worker who provides “a function vital to the success of
the business,” according to a state spokesperson.
The total penalty for Tops in Bottoms was settled recently at $4,500, according to the spokesperson.
The board originally filed a judgment for $128,000 after the company
failed to respond to the board. Also, the state board had alleged there
was a much longer period without workers compensation coverage, the
spokesperson said.
Once the company did respond, though, it provided documentation that
showed the shorter time without coverage, limiting it to August 2011 to
February 2012, the spokesperson said.
A representative of Tops in Bottoms did not return calls for comment.
On its website the company notes it has been in business for more than
20 years.
Records also indicate the company faced allegations of failing to
provide workers’ compensation coverage for a period from late 2009 to
early 2010. The resolution of those allegations could not be determined.
In the latest case, the state spokesperson said the board was alerted
that the company was not carrying workers compensation insurance
through an automated process that shares records between the board and
the state Department of Labor. That process indicated the company had
employees, but wasn’t carrying workers’s compensation insurance.
Any employee in a for-profit business must be covered by workers
compensation insurance, the spokesperson said. Owners, though, may
exempt themselves.
Independent contractors may fall outside that coverage. But workers
at Tops in Bottoms were employees for workers’ compensation purposes,
requiring coverage, the spokesperson said.
In determining whether an employer/employee relationship exists, the
board determines whether the workers provides “a function vital to the
success of the business” and whether the worker is “under the direction
and control” of the employer.
Tops in Bottoms is not unique in being penalized by the state board
for failing to have proper workers compensation insurance. In 2012
alone, the state board issued nearly 27,000 individual penalties for not
carrying coverage, the spokesperson said.
From those penalties, the state collected more than $19 million in fines.
BILLINGS, Mont. (AP) — The death of a Montana animal trainer
mauled by a pair of 500-pound captive brown bears could have been
prevented if standard safety practices had been followed, federal
authorities said Tuesday, as state officials revealed that the private
menagerie where the death occurred has seen numerous animal escapes.
Benjamin
Cloutier, 24, was killed in November while cleaning the pens of two
Syrian brown bears — named Griz and Yosemite — at Animals of Montana
near Bozeman. The company provides captive-bred predators and other
animals for photography shoots and motion pictures.
Note: Although from Syria, the bears have links to Al-Qaeda or any other terrorist organization.
The U.S.
Department of Labor said the circumstances of Cloutier's death violated
federal workplace safety rules. The agency proposed $9,000 in fines for
allowing employees to have direct contact with bears and for not
promptly reporting Cloutier's death.
Investigators determined
the death could have been prevented if the bears had been kept in a
separate enclosure while their pen was cleaned, said Jeff Funke, area
director for the Occupational Safety and Health Administration.
"Those
types of apex predators, it's common knowledge that they're dangerous,"
Funke said. "If this were a (captive) bird or a raven or something else
it would have been a different story."
But Animals of Montana
owner Troy Hyde rejected the assertion that Cloutier's death was
preventable, saying putting its trainers inside the cages of predatory
animals "is absolutely something we must do."
"We work inside a
business that's a highly dangerous business, and everybody that works
within this business is very aware of the dangers," he told The
Associated Press. "Those people don't understand what we do. We're not a
zoo."
Hyde also repeated a claim made in the days after
Cloutier's death that Cloutier must have been unconscious before the
mauling, possibly from a fall, because there were no defensive wounds
such as bite marks on his hands.
Funke said investigators considered that possibility but found no evidence of a fall.
"From our perspective it was clearly an attack from a bear," he said.
Of
the two bears, Griz was shot at the scene of the mauling by Demetri
Price, the company's head trainer. Montana wildlife officials had
requested that the second bear also be killed, to protect public safety,
but the company refused. Price described Yosemite as a possible
"bystander" during the mauling because the bear did not have blood on
it.
According to the company, its captive bears have been used
in "attack re-enactments" for films in which trainers are used as
stuntmen. Since Cloutier's death, state wildlife officials have said
they will not allow Yosemite to be used offsite, said Andrea Jones with
Montana Fish, Wildlife and Parks.
The state's investigation
into the mauling turned up numerous animal escapes from the company that
were not reported as required under the company's roadside menagerie
permit, she said.
Those included a black panther, a pair of
breeding lions and a wolf pup, Jones said, adding that the escapes came
to authorities' attention only after neighbors reported them in the wake
of Cloutier's death.
Also, a 2004 injury to an Animals of
Montana worker by a mountain lion — originally reported to the state as a
"scratch" — turned out to be a scalp laceration that cut down to the
worker's skull, Jones said. A doctor told investigators the man could
have been killed if another employee had not stepped and sprayed the
lion with bear spray.
Jones said because some of the unreported
events occurred almost a decade ago and could not be acted upon now.
But she said if anything of the sort occurs again, the company risks
losing its permit.
Animal advocacy groups said the case
underscores a lack of sufficient government regulations for facilities
that keep exotic animals.
Adam Roberts, vice president of Born
Free USA, which tracks such incidents across the country, said it's not
unusual for captive animals to turn on their handlers.
"So
often we're derided as naysayers, but every time an incident like this
happens it just shows how inappropriate wild animals are in captivity,"
Roberts said.
Animals of Montana has 15 days to comply with the
OHSA fine, contest the violations or request an informal conference on
the matter. Hyde said he had not yet had a chance to review the
nine-page violation letter and said no decision had been made on whether
to challenge the citations.
Funke said the proposed fine,
though relatively small, was the maximum penalty in such a case for a
business that employs 25 or fewer people.
Cloutier was
originally from York Haven, Pa. He had worked as a trainer at the
company since 2008 and had been in the bear enclosure hundreds of times,
according to Price.
Park County officials concluded the death was accidental, and no criminal charges were pursued.
Teacher who survived polar bear mauling at zoo 'was depressed over job.
Looking at the trends in Japan, a country (and people) known for their work ethic will help give us insights as to where our workforce trends will lean to.
Japan has always been known for it work ethics. Death from too much work is so commonplace in Japan that there is a word for it -- karoshi. But in past years, the economic crisis that we feel has spread world wide.
For decades, the Japanese government has been trying, and largely
failing, to set limits on work and on overtime. The problem of karoshi
became prevalent enough to warrant its own word in the boom years of the
late 1970s, as the number of Japanese men working more than 60 hours a
week soared.
The consequences show up not only in claims for
death and disability from overwork but in suicides attributed to
"fatigue from work." Among 2,207 work-related suicides in 2007, the most
common reason (672 suicides) was overwork, according to government
figures released in June 2007.
Unpaid overtime is routine in factories and offices across Japan.
At
Toyota, it had been built into factory life -- in the form of long,
after-hours quality-control sessions that were supposedly voluntary --
and was considered a key to the company's success. Participation in the
sessions, though, often figured in a worker's prospects for promotion
and higher pay.
The labor ministry cites 80 hours overtime a month as the point at which
a worker’s health and well-being become compromised. Anything above
that and the chance of karoshi (death from overwork)
becomes more probable.
Tokyo Shimbun found that of the 100 companies
surveyed, 70 have agreements stipulating maximum overtime of more than
80 hours a month. The average is 92 hours. The most is for the printing
company Dai-Nihon Insatsu, where employees can be asked to work up to
200 hours overtime a month.
In second place is Kansai Power Company,
with 193 hours. The ministry, alarmed by this trend, revised the Labor
Standards Law in April 2010 and implemented a new pay system for
overtime work in a bid to check the rise in hours, but it didn’t work.
Thirteen of the companies surveyed have increased the number of
allowable overtime hours since then. Only Hino Motors has reduced them.
YOUNG PEOPLE AND WORK IN JAPAN:
FREETERS AND NEET
Freeters (derived from the English word “free” and the German word for worker Arbeiter) is a term used to describe young part time workers. Comparable in many ways to Generation X slackers, they like to hang out and pursue interests like snowboarding and surfing, work only when they have to and reject traditional Japanese values such hard work and company loyalty.
There were 1.78 million freeters in 2009 according to the Internal Affairs and Communications Ministry. In 2006, 48 percent of those between 15 and 24 and 26 percent of those between 25 and 34 were described as freeters. The number of freeters between the ages of 19 and 30 rose from 1.83 million in 1990 to 4.17 million in 2001, more than a fifth of the population between the age of 15-34, excluding students and homemakers. In that same time period freeters between 25 and 34 tripled.
There are basically three types of freeters: 1) the dream-chasing type (13.7 percent), those who are pursuing dreams in things like pop music and manga drawing and don’t want to be burdened by a real job; 2) hiatus type (46.9 percent), those who have yet to decide what kind of career they want to pursue; and 3) no other choice type (39.4 percent), those who have tried but failed to get a regular job. One survey found that 72 percent of freeters would like to work for a company and have a regular job.
An official in the government Quality of life Bureau told the Los Angeles Times, “From the 1980s to the mid-1990s, most people chose to be freeters for the purpose of living their lives according to their own interests. But now many have no choice because of the difficult job market. As the economy worsened people who became freeters in the ‘90s found they could not escape and cannot acquire job skills. Being a freeter was once a stage, now it is possibly becoming a condition.”
Freeters earn around $7 to $10 an hour working at 7-11 convenience stores, budget restaurants and clothing shops and are employed as sales people, lifeguards and warehouse workers. Some sell jewelry or other stuff on the streets or pass out tissues with advertisements on them at subway stations. Their career ambitions include becoming a professional DJ, playing in a band, designing video games and working as a manga artist.
The average freeter earns only $14,000 a year. That doesn’t go far on one of the world’s most expensive countries. Typically they change jobs 4.3 times in a three year period. More than 50 percent do not contribute to the state pension system.
Many freeters want jobs that are flexible, give them free time, are not too demanding and allow them to wear the clothes and hairstyles they like. One study of freeters found that many lack career goals and "tend not to have any means of connecting their present situations to a future career."
Temporary Workers in Japan
In 2004, labor laws were amended to allow companies to give temporary workers less pay and fewer benefits. This came as a response to company’s saying the needed such changes to remain globally competitive.
The move was part a larger trend under Prime Minister Juichiro Koizumi to make Japan’s economy more flexible and responsive. Companies responded by making many new jobs temporary ones. Numerous temp agencies opened up. For several years there was plenty of work and no one complained. Some even preferred the temporary jobs.
Nonregular workers accounted for 38.7 percent of Japan’s total workforce and part-time workers made up 22.9 percent of all workers as of October 2010. Regular workers accounted for 61.3 percent of Japan’s total workforce
The number of temporary workers increased from around 100,000 in 1990 to 1 million in 2000. In early 2006—after the Koizumi government changed laws to allow companies to hire more temporary staff at lower wages—there were 5.95 million irregular workers, an increase of over 340,000 from the same period the previous year. In 2007, 40 percent of Japanese workers were employed in non regular jobs. In the 1990s they were still considered rarities. The number of temporary workers climbed 4.6 percent to 4 million in 2008.
The trend towards hiring temporary and part time workers at low pay has led to a widening income gap between these workers and permanent workers. Most of those affected are in their 20s and 30s, with the low pay making them unable to afford to get married or have children. The marriage rate of irregular workers between 20 and 34 is about half that of regular workers the same age.
Temporary Workers get paid much less than regular workers, get far fewer benefits and protections and are easy to lay off, and can be easily shed during bad economic times. They often work as hard and as long as full time workers but receive less money and are denied opportunities for advancement.
Some people prefer temporary workers to full time work so they could work the hours they wanted and change jobs when they pleased. Some people have even quit secure company job and gotten jobs through temporary agencies. Robert Feldman of Morgan Stanley Japan told the Los Angeles Times, “People took these jobs because they didn’t want to get trapped in Japan’s lifetime employment system...They wanted to have their jobs and go home rather than work late at night or do whatever their bosses demanded like full-time workers.”
Temporary agencies are forbidden from finding jobs for anyone who has graduated from university within the previous year. There are also rules that limit temporary workers to one year contracts. Even if a company and an employee like each other the employee has to look for a new job after the year is up.
Problems Faced by Temporary Workers in Japan
Temporary day workers have a tough go, They often changes jobs everyday and often don’t know what job to go to until they get a phone call in the morning. Often they don’t get any work at all. It is not unusual for a promised job to be canceled at the last minute.
Many young people find themselves unemployed or living in “entrenched poverty” because policies that protect middle-aged workers have left only poorly-paid, temporary jobs for them. The youth unemployment rate was 8.7 percent in 2005, almost double the 4.4 percent for the population as a whole.
The working poor include 4 million people between 15 and 34 who work part time or in temporary employment. The minimum wage for a month’s work in Tokyo is about $1,000—which many temporary workers don’t get—is lower than the $1,400 they get on welfare.
A kind of lost generation is evolving that is unable to gain full-time employment, can’t earn enough to get married, seem unlikely to produce children and trapped outside the pension and health care systems.
Internet an Manga cafes, charge ¥100 per hour and ¥880 for eight hours from midnight to 8:00am, are often filled with “working poor” who have nowhere else to sleep. Interviews have found that typical Internet café sleeper was a young man doing dispatch work but unable to earn enough to pay rent and young women who had divorced their husbands and worked part time. earning ¥90,000 a month.
In May 2009, a government panels urged the government to do more to help nonregular workers by providing them with unemployment insurance, employee pensions and public health insurance.
Effects of the Economic Crisis in 2008 on Temporary Workers
Many of those who lost their jobs were nonregular, temporary or part time workers who were let go aid off after their contracts were finished or even before then. In some cases these workers lived in company dormitories and were told to leave when their jobs were terminated. Some ended up on the streets as they had little saving and unemployment insurance didn’t provide them with enough to get pay for new housing.
Some temporary workers were told to clear of their dormitory on the day they were notified they were laid off. One construction workers told the Los Angeles Times he slept in a subway and camped out ay Denny’s and finally pitched a tent in a Tokyo park after he was suddenly laid off.
A January 2009 survey counted 124,800 nonregular workers who lost their jobs, with only 10 percent of them able to find new jobs. Homeless shelters filled up with young people. Some women that lost their jobs lost their homes and were forces to sleep in all-night restaurants and Internet cafes.
A tent village made up of so-called “employment refugees” was set up in park in central Tokyo. Many of those there were temporary workers who lost housing with their jobs. A 49-year-old man in the villager told Kyodo, “I felt relief staying here as I had no food and housing, but I’m at a loss now and don’t know what to do next.” In Osaka, a 49-year-old temporary worker starved to death. The man was found dead in his apartment about a month after he died by apartment manner trying to collect overdue rent.
Labor lawyer Kenji Utsunomiya told the Los Angeles Times, “Suddenly workers were caught with no savings, nothing their pockets, because companies treated them as mere objects they could get rid of at their whim. People believed the government would take care of them. Now they know that’s not true.”
The number of temporary workers declined 24 percent in fiscal 2009-2010 to about 3.02 million . After the “Lehman shock” many companies terminated or did not renew temporary worker contracts.”
Day Laborers in Japan
“One call” day laborers refers to workers who let employment agencies know when they are available to work and wait for calls or e-mail messages on their cell phones that let them know if work is available. If they respond quickly enough the can get work for that day. The workers worker eight hours and are paid ¥6,000 to ¥7,000, after train fare in subtracted. The employment agencies that contact the workers are paid ¥12,500 yen by the company that provide the work.
The workers are often paid in cash on that day. Many are fretters or older workers who have lost their jobs. The service is a lifeline for workers who don’t have jobs but the wages are low and there is no guarantee of work on a given day. In a good month a worker may work most days and earn ¥130,000. In a bad month he may work only 10 days and earn ¥70,000. Such workers get no unemployment insurance and generally don’t earn enough to pay into the pension system.
In 2004 a ban on dispatch temporary workers doing manufacturing jobs was lifted. In 2008, a total of 5,631 dispatch workers were injured and 31 were killed in work related accidents. In 2007 there were 254 more injuries and five more deaths. The high number have been blamed on inexperienced workers placed in dangerous manufacturing jobs.
Discouraged Young Workers in Japan
Martin Fackler wrote in the New York Times, “Kenichi Horie was a promising auto engineer, exactly the sort of youthful talent Japan needs to maintain its edge over hungry Korean and Chinese rivals. As a worker in his early 30s at a major carmaker, Mr. Horie won praise for his design work on advanced biofuel systems.
But like many young Japanese, he was a so-called irregular worker, kept on a temporary staff contract with little of the job security and half the salary of the “regular” employees, most of them workers in their late 40s or older. After more than a decade of trying to gain regular status, Mr. Horie finally quit — not just the temporary jobs, but Japan altogether. He moved to Taiwan two years ago to study Chinese.” “Japanese companies are wasting the young generations to protect older workers,” said Mr. Horie, now 36. “In Japan, they closed the doors on me. In Taiwan, they tell me I have a perfect résumé.” [Source: Martin Fackler, New York Times, January 27, 2011]
“Japan has the worst generational inequality in the world,” said Manabu Shimasawa, a professor of social policy at Akita University, told the New York Times. He has written extensively on such inequalities. “Japan has lost its vitality because the older generations don’t step aside, allowing the young generations a chance to take new challenges and grow, he said.
“These disparities manifest themselves in many ways....There are corporations that hire all too many young people for low-paying, dead-end jobs — in effect, forcing them to shoulder the costs of preserving cushier jobs for older employees.
Others point to an underfinanced pension system so skewed in favor of older Japanese that many younger workers simply refuse to pay; a “silver democracy” that spends far more on the elderly than on education and child care — an issue that is familiar to Americans; and outdated hiring practices that have created a new “lost generation” of disenfranchised youth.
Young People Abandoning the System
“There is a mismatch between the old system and the young generations,” Yuki Honda, a professor of education at the University of Tokyo, told Bloomberg News. “Many young Japanese don’t want the same work-dominated lifestyles of their parents’ generation, but they have no choices.”
Tomohiro Ohsumi wrote in Bloomberg News: “The result is that young Japanese are fleeing the program in droves: half of workers below the age of 35 now fail to make their legally mandated payments, even though that means they must face the future with no pension at all. “In France, the young people take to the streets,” Mr. Takahashi said. “In Japan, they just don’t pay.”
“Or they drop out, as did many in Japan’s first “lost generation” a decade ago. One was Kyoko, who was afraid to give her last name for fear it would further damage her job prospects. “After interviewing at 10 companies, she said she suffered a minor nervous breakdown, and stopped. She said she realized that she did not want to become an overworked corporate warrior like her father.
By failing to get such a job before graduating, Kyoko was forced to join the ranks of the “freeters.” Since graduating in 2004 she has held six jobs, none of them paying unemployment insurance, pension or a monthly salary of more than 150,000 yen, or about $1,800. “I realized that wasn’t who I wanted to be,” recalled Kyoko, now 29. “But why has being myself cost me so dearly?”
Sources: New York Times, Washington Post, Los Angeles Times, Daily Yomiuri, Times of London, National Geographic, The New Yorker, Time, Newsweek, Reuters, AP, and various books and other publications.
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