Most people in South Carolina realize that working in construction carries with it a risk of serious injury. But imagine getting badly hurt on a construction job only to find out that your boss' workers' compensation insurance policy does not cover you, leaving you to pay your medical bills and lost wages yourself.
Sound unfair? That may be what will happen to a man who was paralyzed in a construction accident over the border in North Carolina. That is because his employer, a subcontracting company, bought a special type of workers' compensation policy meant for self-employed people called a "ghost" policy. The policy is referred to that way because the employer might hire an employee, or "ghost," during the year the policy covers.
Unfortunately, observers say, many employers in the construction industry abuse the system by claiming to have no employees on their staff, only independent contractors. They will often have their "contractors," who are in fact employees under state and federal law, purchase ghost policies of their own and pay for them. Employers still save money because policies are much less expensive that standard workers' compensation insurance.
However, when a construction worker is injured, it may become difficult or impossible for him or her to be properly compensated. The North Carolina man, who has no sensation below his chest, will need nearly $8 million worth of care the rest of his life. However, he has yet to receive any money from his employers' insurer, though a state commission has ruled that the employer fraudulently labeled his employees as contractors and ordered his insurance company to pay. The case is currently under appeal.
Source: Charlotte Observer, "Injured worker pays for employer's gamble," Mandy Locke, Aug. 20, 2012
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