Pennsylvania Construction Owner Sentenced For Worker's Comp Violations

March 17, 2005
The owner of a Pennsylvania construction firm has been convicted on criminal charges of failing to maintain workers' compensation coverage and has been ordered to pay more than $77,000 in restitution, among other penalties.

The Pennsylvania Department of Labor and Industry's Bureau of Workers' Compensation compliance unit on March 10 reported the successful prosecution of Michael D. Cost, owner of Mike Cost Construction in Hamlin, Pa., in the Wayne County Court of Common Pleas.

Cost pleaded guilty to two third-degree misdemeanor counts. For the first count, Cost was placed on probation for 12 months; ordered to pay prosecution costs, a fine of $250 and restitution of $77,476.96 at a minimum rate of $750 per month (of which $50,000 has already been paid); perform 100 hours of community service within 3 months; and be subject to random drug testing and personal/property searches.

For the second misdemeanor count, Cost was placed on probation for an additional 12 months, consecutive to the first count; ordered to pay a fine of $250 and a supervision fee of $50 per month; and perform an additional 100 hours of community service within six months.

Judge Robert J. Conway sentenced Cost in February.

Section 305 of the Pennsylvania Workers' Compensation Act specifies that an employer's failure to ensure its workers' compensation liability is a criminal offense, and classifies each day's violation as a separate offense -- either a third-degree misdemeanor, or if intentional, a third-degree felony.

The bureau's compliance unit reports that Mike Cost Construction is no longer operating with employees.

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