Today’s article talks about a grand scheme that may have conned around 40 companies who are now left without workers’ compensation insurance. Injured workers at these companies are now wondering who is going to pay for their expensive bills.

Mike New worked as a carpenter and fell off scaffolding breaking his left arm, his right wrist, a rib, a vertebra and his sternum. At the time he was working for Professional Staffing and Payroll Services at Island Coast Builders Inc., who was one of the companies that utilized the staffing company. New and Island Coast assumed that the portion Professional took out of his paycheck went towards paying workers’ compensation fees to the insurer Travelers. The staffing company shut down quickly in July and the principal, Ivan Hernandez, is seemingly MIA. Turns out those portions out of New’s paycheck might not have gone towards workers’ compensation.

New has been filing for workers’ compensation to pay for his costly medical bills but has only gotten denied from Travelers. The state’s Division of Workers’ Compensation issued a stop-work order to Professional and they are investigating the company who may have been concealing payroll and failing to obtain workers’ compensation coverage.

New does have health insurance but is it not yet determined whether they will pay for his work-related medical expenses since many policies exclude work injuries. In a typical situation like this New would probably sue Hernandez to get his compensation, but now he is nowhere to be found.

A bookkeeper for Professional Staffing discovered that their contract with Travelers was only for two clerical employees even though they were doing payroll for 40 companies. She says she has no idea how much Hernandez may have been paying (or not paying) for workers’ compensation or other deductions like state unemployment and federal tax.

According to a supervisor with Island Coast Builders, the payroll for Island Coast Builders and presumably the other 39 companies working with Professional employees would operate like this:

The supervisor would bring Professional a check for the entire prededuction payroll for all their workers that week. Professional would then give them back everyone’s individual payroll check with the deductions and their management fee already taken out. So it was likely pretty hard to tell where those deductions were really going.

A second worker whose company used Professional’s services has found himself in a similar situation. He is a masonry worker who developed a MRSA infection after a leg injury and cannot find another job because in his line of work it is difficult to be working with an injury like that. This employee was also having trouble claiming unemployment benefits because Professional was supposed to handle that too.

I hope that Hernandez can be found and that his debts to these workers will be reconciled. The business owner where the second worker was staffed at ended up paying out of pocket for his bills but not everyone is so fortunate.