Contractor Fined More Than $136,000 for Workers' Comp Violations

March 1, 2005
The Washington state Department of Labor and Industries (L&I) has put Skanska USA Building Inc. on notice that it will lose its certificate to self-insure if it doesn't improve the way it manages workers' compensation insurance claims.

In addition to the "corrective action," L&I issued the largest fine ever levied by the agency against a self-insured employer, assessing Skanska USA $136,264 in penalties for its mismanagement of workers' compensation claims over the past 6 years. That is in addition to the $124,811 an L&I audit found the company underpaid injured workers who did file claims.

Skanska has begun taking steps to correct deficiencies in its handling of claims, but is protesting the audit findings. Skanska USA Building Inc. Area General Manager Bob Babitsky says that L&I's determination regarding Skanska's reporting of on-the-job employee injuries to the agency is a departure from Washington State law.

Skanska, formerly Baugh Construction asserts that on-the-job injuries do not have to be reported as "claims" as the department mandates in its Workers' Compensation Self-Insurance Rules and Regulations. Skanska maintains that virtually all of the state allegations are the result of agency regulations and interpretations that do not conform to the state statute.

We are taking this notice from L&I very seriously, but we believe we have followed the state statute explicitly. We care about the welfare of each and every employee and are satisfied that any injured worker was properly compensated and their medical expenses were paid," Babitsky stated.

L&I has asked the company for records that support its contention that some of the audit findings are wrong.

Skanska AB is headquartered in Sweden. Three years ago, it purchased Baugh Construction Co. An L&I audit of the firm found that under both ownerships, the company failed to provide forms to file workers' compensation claims to at least 468 workers who were injured on the job. The violations date back to 1999. Workers told L&I investigators that company officials threatened to fire them, or not hire them back on other jobs, if they filed a workplace injury claim.

"Employees at companies that self-insure deserve and are entitled to the same level of benefits and protections as workers covered by the State Fund," said Robert Malooly, head of L&I's Insurance Services Division, which runs Washington's workers' compensation system. "It's our job to make sure that happens, and that employers live up to their responsibilities under the law.'"

In addition to the fine and back payments, L&I will closely monitor Skanska's management of its workers' compensation claims to ensure the company has corrected its practices and is compliance with the law. Malooly said the agency will take steps to revoke the company's self-insurance status if it doesn't manage claims properly.

Washington state law allows companies that meet established financial and safety criteria to manage their own workers' compensation claims. About 385 companies in Washington are self-insured. They employ about a third of the state's workforce. While self-insured companies don't pay premiums, they do pay L&I a fee to oversee the administration of their system. L&I audits self-insured companies to make sure they are managing workplace injury and illness claims properly.

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