[Update (10/11/2011) below]
Phyllis Zorn of the Enid (OK) News and Eagle reports that the employer of the two teenage workers who lost legs last month in a grain auger failed to maintain workers’ compensation insurance. She writes:
“Oklahoma Department of Labor has fined the company $750 for failing to comply with workers’ compensation law, the maximum fine allowed in the scenario under current law. ‘Zaloudek Grain Co. had not carried workers’ compensation insurance for the five months prior to the accident,’ Labor Commissioner Mark Costello said. ‘Zaloudek had obtained workers’ compensation insurance on Aug. 9, five days after the horrific accident.’”
Employers in Oklahoma, like employers in most States, are required to maintain workers’ compensation insurance to cover the medical expenses and lost wages of workers injured or made ill by exposures at work. In exchange, workers are not allowed to sue their employers for injuries related to their work. This “exclusive remedy” was a compromise reached 100 years ago when States began adopting mandatory workers’ compensation laws in 1911. An employer, like Zaloudek Grain, that violates the laws by failing to maintain workers’ compensation coverage falls outside that “exclusive remedy” boundary. This creates potential challenges and opportunities for the two injured workers and their families.
Without workers’ compensation insurance in place, questions arise about how the young men’s surgical, hospital and long-term rehabilitation expenses will be paid. Six weeks after the incident, one of the young workers remains in the OU Medical Center in Oklahoma City; the other worker was hospitalized for four weeks. A single night stay in the hospital is a pricey endeavor. Just imagine the bill for a month or more of hospital care. If the young men’s parents have private health insurance, its unlikely their insurance companies will agree to pay the bill for their care. The insurer will note that their dependents’ very serious injuries were work-related and therefore not covered by the health plan.
Without however the “exclusive remedy” boundary of workers’ compensation, the teen workers’ families could sue their sons’ employer for damages. Filing a lawsuit for damages and actually succeeding is another story, but one Tulsa, Oklahoma law firm says:
“Most uninsured Oklahoma employers don’t fair well and are treated quite harshly by both the Oklahoma City & Tulsa Workmens Compensation Courts as well as the Oklahoma District Courts, for failing to purchase workers’ comp insurance.”
It’s unclear to me whether Zaloudek Grain has significant assets for which the teens’ families could make a claim. What if their only asset is the grain elevator and some land? Would the sale of this property provide sufficient funds to cover the young workers’ hospital bills, long-term rehabilitation and income replacement?
A number of states have special funds established to pay medical and wage claims of injured workers whose employers failed to maintain workers’ comp coverage. The little research I’ve done suggests that Oklahoma does not have such a fund; if I’m wrong, please let me know by commenting below.
State workers’ compensation laws establish benefit schedules for different types and severity of injuries. Under Oklahoma workers’ comp law, a worker who suffers a permanent partial disability, such as the loss of a leg, is eligible for no less than $150 per week, but not more than 70% of the employee’s average weekly wage, not to exceed $323. That’d be $7,800 to no more than $16,796 per year in income replacement for these young men. No one’s living in luxury off of work-comp benefits. I’d hope that the teen workers’ families would succeed in a lawsuit to secure substantially more than this modest amount.
[10/11/2011 Update: Phyllis Zorn of the Enid News and Eagle reports on the dispute between Zaloudek Grain and CompSource Oklahoma on whether the employer's workers' compensation coverage was in affect on August 4. Zaloudek is suing CompSource Oklahoma for breach of contract, saying the insurance carrier wrongly cancelled their insurance policy in March 2011. CompSource says it requested audit information from the employer in February and it was not provided. The dispute is really about who is responsible for the medicare and rehabilitation care costs of the two young men.]