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Auditors find weak workers’ comp coverage, enforcement
Nearly half the eligible businesses in Georgia may not carry workers’ compensation insurance as required, state auditors say.
If that’s true, roughly 1.5 million workers potentially would not be covered in the event of a workplace accident.
The state’s methods of monitoring compliance are inefficient and could be improved with the use of relatively simple methodologies used by other states, auditors said in a report released last week.
Auditors identified 86,000 businesses in Georgia who might be required to have worker’s comp coverage. But as many as 39,000 — or 45 percent — might not carry the insurance, based on a comparison with data kept by the National Council on Compensation Insurance. (Some businesses, such as those employing farm or domestic workers, are exempt.)
The State Board of Workers’ Compensation does not check those businesses. Instead, in 2008, it inspected 4 percent of Georgia businesses by going door-to-door in selected geographic areas without knowing whether there’s a particular problem there. At that rate, the reported noted, it would take 30 years to inspect each of the state’s 217,000 businesses.
As a start, the auditors suggested mailing inspection forms to the 39,000 potentially non-compliant businesses and asking for proof of insurance. The board could also target industries that are most likely to produce worker’s comp claims, which it does not appear to do now.
In response, the board said it had begun discussions with the Georgia Department of Labor to access its business and insurance data. It also plans to begin coding its records by industry to identify high-risk business sectors.
Auditors also questioned the board’s enforcement practices. The staff often assesses lighter fines than it could, anticipating that an administrative law judge would probably reduce a higher fine.
Some businesses save money by skipping the insurance and rolling the dice on whether they will be fined, auditors said. The state fined one timber company $2,500 in 2007, rather than the maximum $5,000; the company obtained insurance carrying a $28,000 annual premium, but dropped it a few months later and has not reinstated coverag since.
Auditors found no evidence that inspectors routinely recheck previous offenders, as their procedures manual calls for.