This is my first post. What is the real reason companies like to come to Texas? Texas companies don't have to pay when employees are injured on the job. Who does, you ask? The taxpayers. Move your company to Texas. Pay low wages and maim and kill your employees. Don't worry we got more to take their place.
In 1991 Texas made sweeping reforms to the Workers' Compensation system. There were two critical pieces to screwing the injured employees of Texas: (1) Taking lawyers out of the system that represent employees; and (2) Allowing companies to opt-out of the Workers' Compensation system all together, which are called non-subscribers. I will try to do this with as little legalese as possible.
The Non-Subscribers:
Texas is number 50 in workers covered by Workers' Compensation insurance Why pay for injuries when you can get away with murder?
John is a machinist. He works on a machine with a spinning blade called a lathe. The lathe should have a guard, but the Company removed the guard, which allows the Worker to work faster. John has complained repeatedly to his boss about the lack of a guard. His boss told him to keep quiet about the guard or lose his job. One day, the lathe spinning at 200 rpm comes off and with no guard to stop it, removes John's arm at the shoulder. John bleeds to death on the Company floor. There is no Workers' Compensation for Johnâs wife and three kids, because the Company is a non-subscriber.
John's wife calls me and we sue the company in Court. The Company says "ha ha" no jury trial for you because your employment contract has an arbitration clause. The arbitration clause says you have to arbitrate with ABC Arbitration. Arbitration is, for those unfamiliar, a binding legal decision where one person is the judge, jury, and executioner. There is no appeal. And, remember the Company chose the ABC Arbitrator and they know what they are getting. No company is going to choose an Employee friendly arbitrator. The fair arbitrators [the ones that actually find for the employee time to time] find themselves out of work. The arbitrators are almost uniformly former in-house corporate lawyers or republican judges. The arbitrator also controls the flow of information. Unlike court, John's family cannot force the company to turn over lists of prior injuries, prior complaints, and other incriminating documents. The Company holds all of the cards and John's family loses. The arbitrator finds the company was not negligent and it was John's fault.
John's family is now on Medicaid, social security, and food stamps. Just another family the republicans can point to sucking off the government tit.
See the brilliance: Save Company hundreds of thousands of dollars in insurance premiums, screw the family, create a poster child for the ills of the welfare state.
Workers' Compensation:
Take the lawyers out the system because they are driving up costs. Sound familiar. The same reasoning brought you medical malpractice reform in Texas. If a doctor cuts off the wrong leg --- $250,000 and that's it. But, we will save that rant for another day.
Workers' Compensation is no-fault. If you are injured on the job in the course of your employment [with a few exceptions] the Insurance Company will pay your medical bills and 70% lost wages for up to four years. There are caps on the lost wages.
Bob is courier and he is making a delivery and falls down a flight of steps. Bob sees an orthopedic surgeon [chosen by the employer's insurance company]. Bob does not get to choose his own doctor. The orthopedic surgeon tells Bob he is fine and to go back to work. Bob has numbness and tingling in his fingers a sign of nerve damage in his neck. Bob has now entered the Twilight Zone of Texas Workers' Compensation.
Workers' Compensation Insurance companies can hire as many lawyers as they want for as much money as they want. They usually hire the lawyers that write the workers' compensation laws. Who can the employee hire? Not me. And, quite frankly, no talented lawyer will take these cases. You can't get paid. A lawyer can charge $150.00 per hour. The bills must be sent to and approved by the Texas Workers' Compensation Commission, which then forwards them on to the Insurance Company. But, and it is a big but, the lawyer can only be paid out the employees benefits, not to exceed 25% of his check. If the employee is getting $400.00 per week, the lawyer can get $100 per week.
Bob is supposed to live on 70% of his prior wages less another 25% for the lawyer. Insanity.
In the example above, Bob is not getting benefits, because the insurance whore of a doctor sent him back to work. So, the lawyer is working for free or on the hopes that one day he can win the case and get paid. "Well, $150.00 per hour sounds like a lot to me", you say. Remember, there is no guarantee of getting paid. More importantly, that is not take home pay. A lawyer needs office space, paralegals, law library, and all of the other costs of running an office.
We analyzed taking these cases. I really want to help Bob and people in his position. I had my accountant calculate the cost per hour to have a lawyer sitting in the office. In the end, it costs $186.00 per hour to have me sitting in this chair. It is a net loser from the start.
What happens to Bob? He will probably end up going to one of the county hospitals to have an MRI and subsequent therapy and surgery. He could use his health insurance, but he doesn't have any. He could start navigating the maze of benefit review conferences, contested case hearing and appeals with help of an ombudsman, a free non-lawyer provided by the State, while the Insurance Company has the best lawyers money can buy. Bob is screwed, the Insurance Company avoids a costly claim, and the taxpayer picks up the bill.
Corporate Socialism at its best. Bob is now out of work because the company retaliated against him for filing the workers' compensation claim in the first place. We could sue for wrongful termination, which in some very limited cases is still illegal in Texas. But, we don't. That's right, you're catching on. We don't because we would be stuck right back in arbitration.