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May 9, 2006

L&I lowers fine, penalties against self-insured contractor

TUMWATER — Upon further review of more detailed audit information, and as a result of Skanska’s improved handling of workers’ compensation claims, the Department of Labor & Industries (L&I) has, in a negotiated settlement, cut nearly in half the $136,264 fine it levied a year ago against Skanska USA Building Inc. The final penalty is $68,272.

“Our goal, always, has been to make sure that when a Skanska employee or any other Washington state employee is injured on the job, he or she receives the medical care and other benefits they are entitled to,” said Robert Malooly, head of L&I’s Insurance Services Division. “We’ve monitored Skanska’s performance over the past 12 months, and it has improved dramatically. This is a way of acknowledging that Skanska is doing right by its employees.”

That sentiment is echoed by Michael Settles, business representative for the Pacific Northwest Regional Council of Carpenters, who spoke for all unions at Skanska when he praised the cooperative settlement, calling it a “win-win resolution.” Settles said: “All the issues were laid out, discussed and finally resolved. L&I sent a strong message to the employer community that it takes the safety of Washington workers very seriously. The labor community stands behind both the Department of Labor & Industries and Skanska as the rights of injured workers were maintained.”

A year ago, following an audit of the self-insured company, L&I put Skanska USA, a commercial and residential contractor based in New Jersey, on “corrective action,” levying $136,264 in penalties and ordering the company to repay its workers $124,811 in wage-replacement benefits the audit found they had been denied. L&I identified 461 cases in which workers’ compensation claims could or should have been filed by or on behalf of Skanska employees. All 461 claims have now been filed.

Skanska, which purchased Baugh Construction in 2000, took steps to improve its handling of claims, fully cooperated in L&I's investigation, but also protested the audit’s findings. As part of that protest, Skanska produced records that show the company had already paid a significant portion of the employee benefits originally identified by the audit as unpaid. Bob Babitisky, Skanska’s area general manager, said that “Skanska is committed to protecting the health and safety of its workers and to ensuring that anyone injured on the job receives the benefits to which they are entitled.”

Malooly said every worker owed back benefits will receive them.

Washington law allows companies that meet established financial and safety criteria to manage their own workers’ comp claims. L&I audits those companies to ensure claims are being managed properly. About 385 companies in Washington — employing about one-third of the workforce — are self-insured.

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For more information: Robert T. Nelson at 360-902-6043 or nelq235@lni.wa.gov

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