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October 1, 2003

L&I orders ‘repeat offender’ to pay back premiums and penalties

TUMWATER - The Department of Labor & Industries (L&I) has ordered a Yakima contractor to pay $107,112 for inaccurately reporting hours for workers’ compensation insurance. Jude Doty, owner of Doty House Moving, has been served a Notice of Assessment for collection of back premiums and related penalties. He has 30 days to appeal the assessment.

“This employer has repeatedly been told to maintain appropriate payroll records and report worker hours for each quarter,” said Reuel Paradis, Regional Administrator for L&I’s offices in Central Washington. “Previous efforts to help Mr. Doty understand his obligations to accurately report and to pay his workers’ compensation premiums have not been successful. Negotiated settlements have been broken. We consider this contractor a ‘repeat offender’ who has tried to cheat the state’s workers’ compensation program and who has created an unfair business advantage in his industry in Central Washington.”

This action is part of L&I’s broader focus to create an environment in which honest employers aren’t at a competitive disadvantage to employers who don’t pay workers’ compensation premiums. The agency is working to identify repeat violators who fail to register and willfully fail to report, or underreport, the number of hours their employees work on a quarterly basis. Additionally, L&I is building systems to crosscheck records with the state departments of Revenue and Employment Security to find employers who are employing workers but fail to pay into the workers’ compensation system. In these cases, the agency will use every means necessary to bring them into compliance. Failure to comply with the law may result in a company’s loss of the right to employ workers and could wind up in a criminal prosecution.

Paradis noted that this action with Jude Doty is separate from citations L&I issued to this contractor earlier in the year, which included $4,400 for multiple safety and health violations and $26,500 for various child-labor violations. Each of those citations are currently under appeal.

L&I has audited this company five times since 1990, when an injured worker sought medical treatment and the agency learned that the employer did not have industrial insurance for his employees. This employer has been repeatedly told to maintain and report accurate hours for his employees, but has failed to do so.

The problem of underreporting or failure to report worker hours is a significant problem in some segments of the construction industry. Failure to report worker hours enables dishonest contractors to underbid their honest competitors. And when an employee for a dishonest contractor is hurt on the job, honest employers end up footing the bill because they are the ones paying for benefits for injured workers.

"We want a level playing field so that contractors who contribute to the fund and pay their fair share aren't at a financial disadvantage," said Paradis. "We are determined to make sure that employers are meeting their obligations to the workers’ compensation system by accurately reporting worker hours and paying their premiums.”

L&I manages the workers' compensation system for Washington, overseeing premium payments and benefits for about 163,000 employers and 1.9 million workers.

Any worker who suffers a workplace injury is encouraged to seek medical treatment and file an L&I claim. Dishonest employers who do not pay their share into the system may be penalized, and charged back premiums and reimbursement for work-related medical claims made by their employees.

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For media information, call Lisa Pemberton at 360-902-5405 or e-mail: peml235@lni.wa.gov.

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