A fall into the abyss 

Workers’ compensation insurance is designed to protect people. It helps ensure that an on-the-job injury does not mean financial disaster.

In California it was important enough for the Legislature to legally mandate that all employers have some form of workers’ compensation.

But what happens when an employer decides not to follow the law?

For Stephanie Blackburn, such a situation meant mounting medical bills and a lot of time in court.

Blackburn, a 32-year-old from Cambria, hurt her foot when she slipped and fell in mid-2006 at a Cambria deli she formerly managed. The owner was an insurance agent who bought the deli after Blackburn began working there and was preparing to let her run it, she said.

After her fall she let the owner know that she had been hurt and had to leave. He was sympathetic, Blackburn said, but was insistent that she call him before seeing a doctor.

“He says, ‘By the way, don’t say anything about insurance, tell them it happened at home,’” Blackburn said.

Blackburn went to the doctor, but ignored that request and told her doctor that she had been injured at work. After her visit Blackburn learned that she had fractured the top of her foot and had a herniated disk in her back, the latter of which required physical therapy and surgery.

Then she found that her employer had not purchased any workers’ compensation insurance.

The employer could not be reached for comment, but a New Times reporter reviewed documents supporting her claims. Blackburn filed a civil lawsuit against him, but it was dismissed after he filed for bankruptcy. She has a process slowly winding its way through the state bureaucracy, but for now she says she’s out about $60,000.

The state passed legislation in 1972 to cover people like Blackburn who are injured on the job, only to find their employer was operating illegally. That legislation established the Uninsured Employers Benefits Trust Fund (UEBTF). The state collects money through an assessment on all state employees, which is then allocated to injured, uninsured employees. Additionally, uninsured employers have to repay money taken from the fund.

According to the California Department of Industrial Relations Division of Workers’ Compensation, there is an increasing trend in the number of cases involving uninsured employers. In fiscal year 2003-04 there were 1,348 cases, which totaled about $18 million of payments. In 2006-07 there were 2,253 cases, totaling $34.3 million.

Theoretically, employees can bill the state for job-related medical costs. In practice, however, the process is more complicated.

The injured employee first has to file a claim with the Workers’ Compensation Appeals Board. Next, the uninsured employer must be notified with a “special notice of lawsuit” and then the case goes before a workers’ compensation judge.

But in court the burden of proof falls on the employee, who has to prove that they were employed, that they were injured on the job, and that they have resulting medical bills.

It’s complicated, admits SLO attorney John Spatafore, who specializes in workers’ compensation cases and is representing Blackburn. It’s also a process that most people have trouble getting through alone. Recouping medical costs from the state is tantamount to putting the employee in the position of an insurance company, he said, which means chasing down money and proving that it belongs to you.

“Quite frankly, if it’s an uninsured situation, you have to create a whole delivery system for yourself.”

Some attorneys can be reluctant to take these types of cases because they don’t pay much. Blackburn said she was unable to find an attorney until recently hiring Spatafore. Attorneys in UEBTF cases have their fees set by the appeals board, which are generally low, and they cannot charge the injured worker directly, Spatafore said.

When a determination is made, the state will retroactively cover incurred medical costs and then pick up future bills. But it takes a while. Without a determination on her case, Blackburn’s medical bills have continued to escalate. Meanwhile her disability has run out, and her employer has changed his phone number and effectively disappeared.

Blackburn is still working through the appeals process and is awaiting a court decision on whether she will be paid. “After two years the wheels are starting to turn,” she said. Still, she added, “The state has not covered anything nor have they said that they will give me a penny.”

Spatafore said, in his experience, that roughly 5 percent of employers do not carry workers’ compensation. According to the most recently published statistics, non-construction laborers represented 31 percent of UEBTF cases, the highest of any profession.

Employers are required to post a company’s workers’ compensation information, generally near other information like minimum wage posters.

Staff writer Colin Rigley can be reached at [email protected].