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DOL Accuses Uber and Lyft of Wage Theft

The Labor Commissioner’s Office has filed separate lawsuits against transportation companies Uber and Lyft for committing wage theft by misclassifying employees as independent contractors. Uber and Lyft have misclassified their drivers, which has deprived these workers of a host of legal protections in violation of California labor law, the lawsuits say.

The goal of the lawsuits is to enforce California labor laws and to ensure that drivers are not misclassified as independent contractors.

In 2018, the California Supreme Court’s Dynamex ruling established the “ABC test” for determining whether a worker is an employee under various California labor laws. Assembly Bill 5, which went into effect on January 1, 2020, extended the ABC test to additional California labor laws. Under the ABC test, workers are considered employees unless they are free from control from the hiring entity, perform work outside of the hiring entity’s usual business, and engage in an independently established trade or occupation.

The lawsuits seek to recover amounts owed to all of Uber’s and Lyft’s drivers, including the nearly 5,000 drivers who have filed claims for owed wages with the Labor Commissioner’s Office. Moreover, the lawsuits seek recovery for a wider range of statutory violations and damages than those asserted in individual wage claims and other lawsuits.

The lawsuits allege that by misclassifying workers, Uber and Lyft failed to meet their obligations as employers as required by California labor law – including to pay drivers at least minimum wage for all hours worked, to pay overtime compensation, to provide paid rest periods, to reimburse drivers for the cost of all equipment and supplies needed to perform their work and for work-related personal vehicle mileage. The suits also allege the companies failed to provide paid sick leave, to provide accurate itemized wage deduction statements, to timely pay all wages owed during and upon separation of employment, and to provide notice of employment-related information required by law.

The lawsuits, filed in Alameda County Superior Court, ask the court to order Uber and Lyft to stop misclassifying their employees and provide the protections available to all employees under the Labor Code. The suits also seek the recovery of unpaid wages, penalties and interest as well as civil penalties and any costs and reasonable attorneys’ fees incurred by the Labor Commissioner’s Office.  

The Labor Commissioner’s Office estimates that Uber and Lyft each employ more than 100,000 drivers. Amounts collected by the Labor Commissioner for unpaid wages, liquidated damages owed to workers, penalties owed to workers, and reimbursement of business expenses owed to workers, will be distributed to all drivers who worked for Uber or Lyft during the time period covered by this lawsuit, not just to those drivers who filed individual claims with the Labor Commissioner.

Floyd Skeren Firm Outlines COVID-19 Defense Strategies

The CWCI COVID-19 tracking tool (see story below) reports a stunning 14,470 California workers’ compensation claims filed so far this year. Some estimates show that the State will have twice that number in a few short months.

The Floyd Skeren Manukian Langevin, LLP – workers’ compensation and employment law firm – was asked about how the firm is responding to the pandemic and these claims from the employer’s point of view.

Partner Amanda Manukian pointed out the importance of her firm remaining fully operational during the pandemic shutdown. A few months ago, officials arrived at the office building in Pasadena where her branch office is located, and ordered the entire building to be closed within two hours.

Fortunately, she reported that as one of the tenants of the building, she easily complied with this time constraint, and her office was fully functional at home by the next day. Prior to the pandemic Floyd Skeren had installed advanced case management technology across all offices statewide. The technology, along with gigabit fiber internet connections between offices supported a seamless transition for the entire firm to stay-at-home work when required.

All of the firm’s staff and attorneys have been fully functional and productive, with essentially no disruption of work flow.

Bernadette O’brien, the firms employment law partner, has held webinars for the firms employment law clients every few weeks. She says that new COVID-19 regulations, both state and federal, are rapidly evolving day by day in response to pandemic. The webinar is updated regularly. and virtually provided for several hundred employers who attend this program for up-to-the-minute compliance guidance.

John Floyd, the firms founding partner, has organized a COVID-19 workers’ compensation defense team within his firm. All COVID-19 claims will be handled only by members of this team.

Mr. Floyd has several physicians doing forensic research for his team, identifying and obtaining the medical studies published every few days about the disease. The studies are reviewed, cataloged and circulated to his team.

This science is evolving, and will be used as a standard to review the medical evidence in these claims. The catalog of studies include many topics, such as the effectiveness of various protective gear, the incubation window between symptoms and infection to help identify the best time frame for the infection to have occurred, and other risk factors other than work for purposes of apportionment.

The COVID team has also done considerable legal research on the validity of Governor Newsom’s Executive Order N-62-20 which created a temporary presumption of industrial causation for some of the workers’ who file COVID-19 claims. The team is now filing briefs in COVID claims across the state, requesting a finding that N-62-20 is unlawful, and invalid as it exceeds the Governor’s authority under the California Emergency Services Act.

The brief then argues in the alternative, that if N-620-20 is found to be a valid exercise of emergency authority, then the costs of the presumption claims should be paid by the State of California, as it would constitute a “taking” for which the California Emergency Services Act requires compensation to be paid by the State to the employer for these claims.

Mr. Floyd concluded by saying that if anyone is interested in more details about how the COVID-19 defense team is responding to these claims, they may contact him by phone or email.

CWCI Tracking Tool Reports 14.470 COVID-19 Claims So Far

The California Workers’ Compensation Institute (CWCI) has released an online application to support interactive analyses and comparisons of COVID-19 and Non-COVID-19 claims. The application is available to the general public.
The new tool features integrated data from CWCI, the Bureau of Labor and Statistics and the California Division of Workers’ Compensation, with detailed information on almost 600,000 reported claims for the first six months of accident years 2019 and 2020 – including 14,470 COVID-19 claims from accident year 2020. The application offers four areas of analysis that will let the user explore and analyze:

— COVID-19 claim counts by month with the ability to segment and filter results by industry, region, injured worker demographics and injury characteristics
— The declining volume of all reported workers compensation claims by industry and region
— Denial rates for COVID-19 and non-COVID-19 claims by month.

— The application provides detailed data on a dozen metrics, including claim volume and incidence, claimant demographics (gender and age), region, injury description (nature and cause of injury), payer type (insured vs. self-insured), and denial rates, In addition, users can also access claims data from the first half of AY 2019 in order to view and compare pre- and post-pandemic claims experience.

CWCI plans on regular refreshes of the application to keep it current as well as expanding the features and functions as additional data on claim type and average and system-wide cost become available.

Healthcare Workers at High COVID-19 Risk Despite PPP

Even with proper PPE (personal protective equipment), frontline healthcare workers battling the coronavirus day in and day out are still at a three times higher risk of testing positive for COVID-19 in comparison to the general population. That’s the main conclusion drawn from a recent study conducted at King’s College London and Harvard University, and then published in Lancet Public Health..

Predictably, healthcare workers treating patients without adequate PPE are at a greater risk of coronavirus infection. Not as predictable, however, was the finding that BAME (Black, Asian, and minority ethnic) healthcare workers are at even greater risk of contracting the coronavirus while wearing proper PPE than their white counterparts.

According to researchers’ calculations, BAME frontline workers are at least five times more likely to test coronavirus positive than the non-Hispanic, white general population.

“The findings of our study have tremendous impact for healthcare workers and hospitals. The data is clear in revealing that there is still an elevated risk of SARS-CoV-2 infection despite availability of PPE,” explains senior study author Sebastien Ourselin, a professor at King’s College London, in a release. “In particular we note that that the BAME community experience elevated risk of infection and in some cases lack access to adequate PPE, or frequently reuse equipment.”

The research team analyzed a huge dataset of both American and British adults (2,035,395 individuals in general and 99,795 frontline healthcare workers). For every 100,000 healthcare workers, 2,747 tested positive for coronavirus. Meanwhile, for every 100,000 members of a general community, only 242 tests came back as COVID-19 positive.

Also, while just over 20% of healthcare workers reported feeling at least one coronavirus symptom (fatigue, loss of smell, loss of taste, etc), only 14.4% of the general population said the same.

This study indicates that PPE, while certainly important, is only a portion of the answer when it comes to protecting doctors and nurses. Besides just making sure healthcare workers have proper access to PPE, the authors say it may be time to start considering additional protection strategies.

Also, equally as important as providing PPE is making sure it is used correctly and properly cleaned before reuse. It’s probably a good idea for frontline workers to avoid reuse of PPE altogether, researchers say.

“The work is important in the context of the widely reported higher death rates amongst healthcare workers from BAME backgrounds. Hopefully a better understanding of the factors contributing to these disparities will inform efforts to better protect workers,” says joint first study author Dr. Mark Graham.

Coventry Workers’ Comp Services Sale Closes

Mitchell International owned Genex Services LLC, a provider of cost containment technology, clinical services, and disability management, announced it has finalized its acquisition of Coventry Workers’ Comp Services from CVS Health.

Coventry Workers’ Comp Services is a provider of care and cost management programs for workers’ compensation and auto insurance carriers, third-party administrators, and self-insured employers.

Coventry Workers’ Comp Services was formerly a division of Aetna, a CVS Health company.

The acquisition adds Coventry’s leading PPO network to Mitchell | Genex’s continuum of care and cost containment offerings for the workers’ compensation and auto industry.

Based in Downers Grove, IL, Coventry Workers’ Comp Services has been a full-service managed care organization for more than 35 years. Coventry Workers’ Comp Services will continue to be led by Art Lynch, President and CEO, and operate under its brand.

“The future brings new challenges and opportunities to our markets, and we’re proud to join the Mitchell | Genex team in enhancing and developing new strategies to help clients meet the evolving demands of our industry,” said Lynch.

The financial terms of the transaction are not being disclosed.

San Jose Cop Faces $18M Payroll Fraud Charges

The Santa Clara County District Attorney’s Office has charged a San Jose police officer with using his private security company to commit insurance fraud, tax evasion, wage theft, and about $18 million in money laundering.

Robert Foster, 47, the Morgan Hill owner of Atlas Private Security, self-surrendered and will be arraigned on November 30th, at the Hall of Justice in San Jose on felony charges. Foster’s wife and eight other company employees are being charged with four counts of felony conspiracy to commit insurance fraud, unemployment insurance fraud, money laundering, and wage theft, and 39 additional felonies, including extortion and a white-collar crime enhancement. They face prison time, if convicted.

The officer and his co-defendants allegedly reduced insurance premiums and taxes by reporting false and inaccurate payroll, underreporting headcount, paying employees off-the-books, and underreporting employee injuries. In one case, an employee was allegedly threatened with deportation if she continued to speak attorneys about her rights under worker’s compensation laws after suffering a workplace injury.

The six-month investigation was spearheaded by the Santa Clara County District Attorney’s Office Bureau of Investigation in close collaboration with the California Department of Insurance, Employment Development Department, California Department of Justice Bureau of Medical Fraud and Elder Abuse and United States Department of Labor.

The probe showed that Foster allegedly hid approximately $8.09 million in payroll over three years, avoided approximately $578,716.56 in tax liability and $560,293.15 in insurance premiums.

To carry on their fraud scheme, the Atlas officials allegedly laundered approximately $18.20 million. The co-conspirators used and traded on Foster’s position as an active-duty San Jose Police Officer and self-described expert in lie detection to further their business interests. Yet, Foster allegedly failed to disclose to SJPD that he owned and operated Atlas or that such ownership could result in ethical conflicts.

The arrest comes just days after District Attorney Jeff Rosen announced a series of social justice reforms that included creating a Workers Exploitation Task Force that will investigate cases such as this one.

“This Office will root out and prosecute anyone – whether they wear a badge or not – taking criminal advantage of workers,” District Attorney Rosen said. “Our new task force will protect and heal the victims of labor trafficking, wage theft and illegal exploitation and raise awareness about how these insidious crimes are attacks on our communities of color.”

Claimant Convicted for Forging Medical Reports

Marlene Cavalcanti, 40, pleaded guilty to two felony counts of insurance fraud and identity theft after falsifying documents to receive an additional $10,590 on her workers’ compensation claim.

Cavalcanti, employed as an executive assistant, reportedly fell at work and sustained injuries. As a result of her subsequent workers’ compensation claim, Cavalcanti received more than $42,000 in total temporary disability payments in addition to her medical treatment.

An investigation by the Department of Insurance revealed after being placed on disability, Cavalcanti ceased medical treatment and began working for another company. During this time, she submitted multiple fictitious doctors reports in an attempt to continue to receive disability payments from the workers’ compensation insurance company.

When confronted by detectives, Cavalcanti ultimately admitted to the fraudulent documents and forged doctors’ signatures.

During the investigation, department detectives discovered Cavalcanti attempted to file a new workers’ compensation claim at a different insurance company with her new employer.

The new workers’ compensation claim dates and injuries were similar and overlapped with her initial claim. The investigation by detectives prevented payment on this subsequent fraudulent claim and the insurance company incurred no loss.

“The Marin County District Attorney’s Office will continue to partner with the California Department of Insurance to investigate and prosecute workers’ compensation fraud in every form. Whether it is claimant fraud as in the case of Ms. Cavalcanti, which drive up premiums for employers, or businesses who seek to gain an unfair advantage by underinsuring their employees, workers’ compensation fraud remains a priority for our office,” said Deputy District Attorney Sean Kensinger.

Cavalcanti is expected back in court September 9, 2020 for sentencing. The Marin County District Attorney’s Office prosecuted this case.

California Hospitals Appear on Best Ortho Hospital List

U.S. News announced the 2020-2021 list of Best Hospitals in the country.

It analyzed data from nearly 5,000 medical centers and survey responses from more than 30,000 physicians to rank hospitals in 16 adult specialties including cancer, cardiology, diabetes, rheumatology and more. Survival rates, patient experience, specialized staff and advanced technologies were among the factors weighed.

Nationally, only 134 hospitals ranked in at least one of the specialties in 2020-2021. The Honor Roll recognizes 20 hospitals for their exceptional care for complex cases across these specialties, as well as recognizes hospitals by state, metro and regional areas for their work in ten more widely performed procedures and conditions, including hip and knee replacement, cancer surgery, heart bypass and more.

With a specialty score of 100/100, Hospital for Special Surgery (HSS) in New York topped the annual Best Hospitals for Orthopedics rankings, which included 1,683 orthopedic hospitals nationwide.

Mayo Clinic Rochester, Cedars-Sinai Medical Center, NYU Langone Orthopedic Hospital and Rush University Medical Center rounded out the top five Best Hospitals for Orthopedics.

However, overall, California hospitals had a respectable showing on the Orthopedic Hospital list, with seven hospitals ranking in the top 30.

#3 – Cedars-Sinai Medical Center,Los Angeles,
#7 – Santa Monica UCLA Medical Center and Orthopedic Hospital
#10 – Scripps La Jolla Hospitals
#12 – Stanford Health Care – Stanford Hospital
#15 – UCSF Medical Center
#26 – John Muir Health – Walnut Creek
#30 – Keck Medical Center of USC

CMS Announces Webinar on New NGHP Reporting User Guide

Section 111 of the Medicare, Medicaid, and SCHIP Extension Act of 2007 added mandatory reporting requirements with respect to Medicare beneficiaries who have coverage under group health plan arrangements as well as for Medicare beneficiaries who receive settlements, judgments, awards or other payment from workers’ compensation, which is referred to as Non-Group Health Plan or NGHP insurance.

The purpose of Section 111 reporting is to enable CMS to pay appropriately for Medicare-covered items and services furnished to Medicare beneficiaries. Workers’ compensation claim information helps CMS determine when other insurance coverage is primary to Medicare, meaning that it should pay for the items and services first before Medicare considers its payment responsibilities.

Reporting is accomplished by either the submission of an electronic file of liability, no-fault, and workers’ compensation claim information, where the injured party is a Medicare beneficiary, or by entry of this claim information directly into a secure Web portal, depending on the volume of data to be submitted.

Upon receipt of this information, CMS checks whether the injured party associated with the claim report is a Medicare beneficiary, and determines if the other insurance is primary to Medicare. CMS then uses this information in the Medicare claims payment process and, if Medicare paid first when it should not have, uses it to seek repayment from the other insurer or the Medicare beneficiary.

The Centers for Medicare and Medicaid Services (CMS) has released a notice announcing it will be holding a webinar for Section 111 non-group health plan (NGHP) reporting on August 13, 2020, at 1:00 p.m. ET.

The agency released a new Section 111 NGHP User Guide in June, which contained a reminder regarding the $750 low dollar reporting threshold, incorporated its recent alert addressing no-fault and med-pay reporting, and provided several other technical update changes. This User Guide is the primary source for Section 111 reporting requirements.

Those interested in attending CMS’s webinar, please see CMS’s notice for further details and webinar registration information.

Please note that for this webinar you will need to access the webinar link and dial in using the information above to access the visual and audio portion of the presentation. Due to the number of participants please dial in at least 15 minutes prior to the start of the presentation

July 27, 2020 – News Podcast


Rene Thomas Folse, JD, Ph.D. is the host for this edition which reports on the following news stories: California Class Action Claims TeamHealth Inflates ER Charges. MSP Reimbursement Not Time Barred 6 Years Post Settlement. Mandated COVID-19 Vaccinations Clash with Employee Rights. DWC Announces New Ethics Committee Appointment. At Least 13 States Considering COVID-19 Liability Limits. Congress Begins Permanent Medicare Transition To Telehealth. AG Approves Sale Of St. Francis Medical Center to Prime Healthcare. Study Says Household Exposure Most Likely Source of Covid-19. Researchers Report on Effectiveness of COVID-19 Masks. Independent Physicians Face Financial Pressure from COVID-19.