Author: WorkCompAcademy

The Labor Commissioner’s Office has cited six garment contractors $573,704 for labor law violations after uncovering a scheme where the contractors illegally operated under one license to avoid compliance. Four of the contractors did not have valid workers’ compensation coverage for their employees.  Shared use of a garment manufacturing registration is illegal.

The Labor Commissioner’s Office discovered that most of the 57 employees at the contractors’ building downtown on South Broadway worked up to 65 hours a week for less than minimum wage. Two workers, ages 15 and 16, were operating industrial sewing machines in violation of California’s child labor laws.

The Labor Commissioner’s investigation began in July after receiving a lead from the Garment AB 633 Unit. Investigators visited the worksite, operating under the name Pure Cotton, Inc. Owner Kyung Ho Choi told them he collected rent but was not involved in the making of garments. His brother-in-law, Kuong Chan Kim, claimed that all of the workers were employed by his company, Union Supply, Inc., which was registered as a garment manufacturer. Further investigation revealed four other garment manufacturing contractors were operating in the building without garment licenses or workers’ compensation insurance. Kim charged each contractor a fee for the use of his license and insurance coverage, which concealed the actual number of workers.

The Labor Commissioner’s Office issued stop work orders to the four contractors operating illegally under the Union Supply, Inc. license and their inventory was confiscated. They were cited for violating wage statement and garment registration provisions, and failure to cover employees with workers’ compensation insurance.

– Cindy Soon Yun, with 20 employees, was cited $118,600. She was also cited for violating child labor laws.
– Sun Park, with 10 employees, was cited $158,855.
– Pil Chang, with 8 employees, was cited $37,450.
– Francisco Tecum Son, with 4 employees, was cited $18,000.
– Union Supply, Inc., with 15 employees, was cited $240,300.
– Pure Cotton, Inc., which has no employees, was cited $500.

The Labor Commissioner’s Office is currently pursuing wage theft investigations of the contractors.

The Garment Manufacturing Act of 1980 requires that all industry employers register with the Labor Commissioner and demonstrate adequate character, competency, and responsibility, including workers’ compensation insurance coverage. Garment manufacturers who contract with unregistered entities are automatically deemed joint employers of the workers in the contract facility. Clothing confiscated from illegal operations cannot be sold, and will be donated to non-profit organizations in the Los Angeles area.

The Labor Commissioner also administers a special wage claim adjudication process for garment workers pursuant to California’s AB 633, passed in 1999. This law provides not only an expedited process for garment workers to file wage claims but also provides a wage guarantee where garment manufacturers are responsible for wage theft at their contractors’ facilities.

The California Chiropractic Association, filed a lawsuit in the San Francisco Superior Court on August 31, against One Call Care Management and Align Networks, Inc. claiming that the defendants engaged in “acts of unfair competition.” It seeks an injunction against the alleged practices, and money damages.

The California Chiropractic Association (CalChiro) was established in 1928, and is a Sacramento-based statewide, nonprofit organization of chiropractic doctors and allied industries. CalChiro is comprised of 27 districts and three student chapters. CalChiro is governed by a board of directors elected by its 2,200 members.

One Call Medical, Inc. is a New Jersey corporation that lists with its principal place of business in Jacksonville, Florida. Align Networks, Inc. was acquired by One Call in 2013 and is also a Florida corporation, and a subsidiary and division of One Call. One Call establishes provider networks for the workers’ compensation community.

According to the allegations of the complaint One Call “is known in the industry as a “cost containment” firm. In essence, One Call is nothing more than a for-profit “middleman” in California’s workers’ compensation system. OCM operates as an unlicensed network broker, contracting, on the one hand, with the payors of workers’ compensation services, including workers’ compensation insurers, self-insured employers and third party administrators, to handle the scheduling and payment of treatment visits for injured workers, and, on the other hand, with the health care professionals who provide health care services to injured workers at the deeply discounted rates imposed by OCM.”

They go on to allege that One Call “generally pays its contracted chiropractors significantly below what chiropractors would be paid under the 2018 California Official Medical Fee Schedule (“OMFS”) for workers’ compensation treatment services.”

However, the complaint alleges that “unlike traditional PPO arrangements, injured workers are not simply free to select a health care provider from among the contracted health care professionals. Rather, OCM assigns injured workers to the provider of OCM’s choosing, thus further ensuring it maximizes its revenue by assigning these injured workers to the providers who have acquiesced to the deepest discounts.”

But then the plaintiffs allege that One Call illegally keeps most of the difference in the reduced fee. They allege for example, “assume OCM agrees to provide all the services one of its client’s injured workers need for 10% less than the OMFS for workers’ compensation treatment services; that is, the client agrees to pay OCM 90% of the OMFS for workers’ compensation treatment services for treatment services needed by its employees and insureds. If OCM then pays its contracted chiropractor 50% of the OMFS, OCM would retain 40% of the OMFS for its management services – nearly as much as the chiropractor received for the provided chiropractic treatment.”

This scheme, according to the allegations of the plaintiffs “violates California’s Unfair Competition Law, Cal. Bus. & Prof. Code §§ 17200, et seq. (“UCL”), as well as the numerous California laws that prohibit Defendants from engaging in illegal payment schemes, prohibiting referral systems for workers’ compensation treatment services that are directly tied to financial incentives, prohibiting Defendants from operating without the required authorizations as a physician network service provider, claims administrator or claims adjustor, and otherwise interfering with the health care services being provided to injured workers by their chiropractors.”

One Call and Align have 30 days to answer or otherwise respond to the allegations of the complaint.

A recent study published in the JAMA Open claims that about one in eight essential medicines in low- and middle-income countries may be fake or contain dangerous mixes of ingredients that put patients’ lives at risk.

Researchers examined data from more 350 previous studies that tested more 400,000 drug samples in low- and middle-income countries. Overall, roughly 14 percent of medicines were counterfeit, expired or otherwise low quality and unlikely to be as safe or effective as patients might expect.

And the lead study author Sachiko Ozawa of the University of North Carolina at Chapel Hill said that while the study didn’t examine high-income countries, drug quality concerns are by no means limited to less affluent nations.

Much of the research to date on counterfeit or otherwise unsafe medicines has focused on Africa, and about half of the studies in the current analysis were done there. Almost one in five medications tested in Africa were fake or otherwise potentially unsafe, researchers report in JAMA Network Open.

Another third of the studies were done in Asia, where about 14 percent of medicines tested were found to be counterfeit or otherwise unsafe.

Antibiotics and antimalarials were the most tested drugs in the analysis. Overall, about 19 percent of antimalarials and 12 percent of antibiotics were falsified or otherwise unsafe.

While fake or improperly made medicines undoubtedly harm patients, the current analysis couldn’t tell how many people suffered serious side effects or died as a result of falsified drugs.

But researchers did try to assess the economic impact of counterfeit or improperly made medicines and found the annual cost might run anywhere from $10 billion to $200 billion.

“Even in high-income countries, purchasing cheaper medicines from illegitimate sources online could result in obtaining substandard or falsified medicines,” Ozawa said. “Verify the source before you buy medications, and make policymakers aware of the problem so they can work to improve the global supply chain of medicines.”‘’

The report “provides important validation of what is largely already known,” Tim Mackey of the Global Health Policy Institute in La Jolla, California, writes in an accompanying editorial. “It is important to note that although the study is comprehensive, its narrow scope means it only provides a snapshot of the entire problem, as it is limited to studies conducted in low- and middle-income countries and to those medicines classified as essential by the World Health Organization.”

The Division of Workers’ Compensation has posted the 2017 ethics advisory committee’s annual report. The workers’ compensation ethics advisory committee is a state committee independent from the DWC, that is charged with reviewing and monitoring complaints of misconduct filed against workers’ compensation administrative law judges.

As civil servants, workers’ compensation administrative law judges (WCALJs or judges) are not subject to review by the California Commission on Judicial Performance, the agency responsible for investigating misconduct complaints against supreme, superior, and appellate court judges. Instead, it is the EAC that monitors and reviews complaints of judicial misconduct filed against WCALJs.

Of the 34 complaints reviewed by the EAC, misconduct was found in five of them. Many of the complaints involved allegations of rude, abrasive or other inappropriate conduct by judges in courtrooms, mostly toward attorneys, at at times toward claimants.

For example, in one case, an applicant claimed the WCJ showed racial prejudice because “as soon as the judge saw complainant’s spouse, before asking any other questions, the judge asked, ‘Do we need an interpreter?’ Complainant’s spouse felt insulted by being regarded as a non-English-speaking person based solely upon the spouse’s appearance and perceived race.”

The same claimant had further problems during trial. ” At several points during the trial, the judge stopped the proceedings and requested to go off the record. Complainant complained that, with arms flailing, the judge used a loud voice directed at complainant and complainant’s attorney.”

In this case, the EAC identified violations of Canons 2A, 3B(7) and 3B(8) of the Code of Judicial Ethics and recommended to the CJ that appropriate action be taken.

In another illustrative case an applicant’s attorney, complained that the judge was prejudiced against the attorney’s firm. The judge would scold the applicant’s attorney in front of the applicant and the defense. The judge’s diatribes concerned what the judge thought the applicant’s firm had done incorrectly in the past. Similar examples were given in other specific litigated cases before the same judge.

In this case, the committee also identified violations of the Code of Judicial Ethics and recommended to the CJ that appropriate action be taken.

Many of the complaints found no ethical violations. Typically, they were based upon complaints about the merits of the claim, asserting the WCJ made the wrong decision. 29 cases were reviewed where no violation was found.

This summer, Atlas General Insurance Services, LLC, added an exclusive new workers’ compensation insurance program with Accredited Surety & Casualty Company, Inc., a Florida-headquartered insurance company.

Accredited recently expanded its insurance offerings to include workers’ compensation and selected Atlas as its exclusive program administrator nationwide.

California is the first state where the program is available, and Atlas is actively working with Accredited to expand this program nationwide.

And now, Atlas announced its new workers’ compensation program for the cannabis industry in California.

This exclusive program with Accredited Surety and Casualty Co. can accommodate work comp risks involved in all aspects of the cannabis industry – including growers, extractors, analytical labs, medicine manufacturers, food & beverage products manufacturing, packaging, warehousing & distribution, transportation and dispensaries.

According to Bill Trzos, CEO of Atlas, “Atlas has been studying the cannabis industry well before it became legalized in California,” said Trzos “through our research we recognized the opportunity to be proactive in entering the cannabis market and are excited to be one of a few work comp platforms in the state.”

While the program is only available in California now, Atlas will be opening this program in other states that have legalized cannabis.

Atlas heard the call to action from Insurance Commissioner Dave Jones last year and responded by developing a comprehensive workers’ compensation program to serve the industry.

“Cannabis businesses should have insurance coverage available to them just like any other California business,” said Insurance Commissioner Dave Jones. “As Insurance Commissioner, my mission is insurance protection for all Californians, which includes insurance for California’s legalized cannabis businesses and its workers.

This new program from Atlas is a crucial step in the right direction for this evolving industry. I encourage more insurance companies to offer cannabis business insurance products with the department to meet the needs of this emerging market.”