Business owners who don’t carry workers’ compensation for their employees are flirting with disaster (and disobeying the law in most states) because accidents happen when you least expect it. For workers who perform job duties that have the potential for injury, workers’ compensation insurance coverage is a must. Otherwise, an injured employee can’t earn an income or pay for medical treatment. (The goal is to put the injured worker back on-the-job as soon as possible, not kick them to the curb to fend for themselves.) The owner of a Hudson, Ohio-based cleaning business committed workers’ compensation fraud by letting her company’s insurance coverage lapse, putting her employees and her business at risk.
Cleaning professionals are exposed to unique risks each day. Accidents are inevitable, such as slipping, falling and breaking bones on wet floors; toxic cleaning chemicals could cause long-term illness; moving heavy furniture or cleaning equipment can cause a back injury; and, repetitive movements with mops, power tools, or other cleaning supplies could cause a repetitive motion injury. Then, there’s also the chance of an assault for employees who clean vacant offices or buildings after the work day is over. (The cleaning business is a risky business.)
The owner of the Hudson, Ohio-based cleaning business did not secure workers’ compensation insurance coverage for two years, while maintaining a staff for professional cleaners. During that time, she intentionally underreported her payroll to avoid paying a higher premium. (That was no accident. She intended to deceive her employees, the insurance company, and the Ohio Bureau of Workers’ Compensation (BWC).) She simply stopped paying the premiums and the coverage lapsed, leaving her employees unprotected.
In order to avoid paying the balance she owed on the original workers’ compensation policy, the cleaning business owner tried to take out another insurance policy in her husband’s name to prevent detection. (She tried to sweep it under the rug so to speak.) The BWC apparently did the “white glove” test and determined that she didn’t do a very good job of erasing her tracks.
The Ohio business owner pleaded guilty to three first-degree misdemeanor counts of workers’ compensation fraud. She was ordered to serve 30 days under house arrest and pay $14,000 in restitution to the BWC. She must also bring her BWC coverage into compliance within 30 days and pay $750 in fines. (I bet her home will be the cleanest it has ever been after a month of intensive cleaning while stuck inside.)
Today’s “Fraud of the Day” is based on an article entitled, “Cleaning company owner pleads guilty to workers comp fraud,” published on BusinessInsurance.com on January 19, 2017.
The Ohio Bureau of Workers Compensation on Friday said the owner of a Hudson, Ohio-based cleaning business must serve 30 days under house arrest and pay $14,000 in restitution to the bureau after pleading guilty to workers comp fraud.
Amanda Joy Klapp, owner of Amanda Joy’s Cleaning Co., has had employees since 2013 but didn’t secure Ohio BWC coverage until 2015, intentionally underreporting payroll to avoid paying a higher premium. She attempted to take out a new policy using her husband’s name to avoid paying the balance owed on her original policy after she stopped paying premiums and the policy lapsed, according the bureau’s special investigations department.