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Guam worker’s comp: a ‘broken’ system

HAGÅTÑA (The Guam Daily Post) — Workers’ compensation allows employees to receive benefits and services when injured at work, but the compensation process has been slow and riddled with challenges for years, according to certain Guam attorneys who navigate what they call a broken system.

Guam employers are required by law to purchase worker’s compensation insurance. The insurance is meant to provide the employee and employer a quick avenue for the disbursement of payments and medical services, along with minimal legal costs, in the event of a work-related injury.

Workers are shown at a construction site on Jan. 5 in Mangilao, Guam.  Photo by John O’Connor/The Guam Daily Post

But Guam law only allows for payment of up to $250 per week — which is a fraction of what some states pay — as temporary disability benefits for injuries incurred on the job. This Guam rate is under the latest amendment to worker’s compensation rates, enacted nearly three decades ago in 1988.

Moreover, to bring resolution to compensation settlements, a worker will need to go through the Workers Compensation Commission or WCC and its board at the Guam Department of Labor, but the six-member panel can take months to meet.

Problems with the commission

In May 2016, attorney John Bell brought a federal complaint against Pacific Composites Inc., certain officials of the company, and its insurer over alleged violations of wage and hour laws and the withholding of worker’s compensation benefits from his clients.

Bell also filed a complaint against JoAnnalynn Fullerton, administrator of the WCC. Bell alleged the practice in Guam over the past five years — at least —   has been to sweep compensation claims “under the rug,” based on information from months of Freedom of Information Act requests.

Fullerton allegedly helped insurance adjusters to deny certain workers’ compensation claims and the WCC allegedly refused to enforce statutory requirements and administrative rules. However, an attorney for Fullerton said it’s not her fault.

The attorney described Fullerton’s situation as an administrator bogged down by a slow-moving board.

Fullerton filed a written declaration in court admitting that she denied accepting an injury notice form for one of Bell’s clients because there was no accompanying employer’s form acknowledging notice of injury — an issue if the employer refuses to provide the form as they are obligated to do, according to Bell.

The forms were accepted by the labor director’s office. There are several instances when Fullerton refused to accept employee claims forms, Bell said.

Fullerton said she had been told not to accept claims forms without the employer’s forms and there was no written instruction on filing procedures.

‘Lack of due process’

Bell shared his concerns to Sen. Regine Biscoe Lee in written testimony for a May 12 information briefing with the local labor department.

“The utter lack of due process and transparency before the WCC is quite literally hard to believe,” Bell stated.

“The WCC board for years held unrecorded meetings, ‘voted’ by non-public telephone calls and emails, denied appeal hearings for over a decade in some cases, and simply rubber-stamped the wishes of the local insurance carriers and Fullerton, who overwhelmingly advocates for the carriers,” Bell stated.

The labor department responded by saying Bell’s statements were unwarranted, that Bell has continually made unsubstantiated claims against Fullerton. The response also noted that the federal complaint against Fullerton was dismissed in court.

Court documents stated that Bell wished to withdraw the complaint against Fullerton, notwithstanding her alleged misconduct, in favor of efficiency with litigation. The court placed a great deal of weight on expeditious litigation in its July order to dismiss Fullerton from the larger complaint.

The case is still pending in court.

A red herring

“There is nothing wrong with JoAnnalynn Fullerton. That is either a red herring or people don’t know what they’re talking about,” said attorney William Gavras, who represented Fullerton in the federal case concerning Bell.

“Analogize it to the courthouse. Fullerton is a clerk who is just supposed to accept papers and set hearings…she’s trying to move cases…she can’t get the board to meet, what’s JoAnn supposed to do?”

Both Bell and Gavras take on labor cases on the island, and both attorneys have worked with Fullerton to push their cases through the commission and the board. Gavras said he has experienced his share of frustration working with WCC administrator, but the crux of the issue exists with a “non-functioning broken board.”

There are six members to the WCC board: a union representative, a doctor, an attorney, a mayor, an accountant and a representative for the government. The accountant position is currently vacant.

In her testimony on May 12, Fullerton said it was difficult to get members to form a quorum, particularly during the holidays. She had begun trying to organize meetings at least every three months. Delays in decision making can subject workers to months without compensation.

It shouldn’t be that way

The WCC is able to handle government disputes, but only serves as a custodian to employee claims with private companies, according to Fullerton. The claimant and the company’s insurance adjuster are left to handle the dispute, she added, after communications are facilitated. The board then approves settlements between private parties, while Fullerton provides recommendations.

“It shouldn’t be that way,” according to Geri Diaz, a lawyer who recently returned from California where she practiced worker’s compensation law. Diaz now works for the Camacho Calvo Law Group.

“I think (Fullerton) is doing a phenomenal job, but if there is no avenue for her to direct people to, she directs them back to themselves. So who knows if the injured worker is actually getting what they’re entitled to, or if the insurance company is giving more than what they have to?”

The solution to these concerns, according to Gavras and Diaz, is to implement an independent adjudicator or administrative law judge with knowledge of worker’s compensation law, as done in other jurisdictions in the United States.

There is no reason to utilize mayors, accountants or other individuals with little understanding of compensation law to decide on settlements between employees and adjusters, according to the attorneys.

“The lack of a deciding body or person tends to delay the process and tends to drag out the process so that an injured worker is not getting the benefits he should be getting because of the dispute, and he would have to make some concessions with the insurance adjuster depending on what they’re willing to pay for,” Diaz said.

“(Workers) are not equipped to fight for themselves, they don’t know what they’re entitled to. So who knows if they’re getting what they’re entitled to.”

Outdated payoffs

A worker receiving compensation must still contend with outdated payment caps. Private sector employees can receive up to $250 a week from their normal pay. A rider was added to the fiscal year 2012 budget act that gave public employees paid administrative leave if they received a doctor’s certification for work injury. However, Guam law contains a cap of $100,000 for total compensation payments that even public employees are subject to.

This means compensation can quickly run out for higher earning public employees before they are well enough to go back to work. Some employees may ask their doctors for certification to return to work prematurely, Diaz said, leading to additional injury.

Compensation rates vary by jurisdiction, according to labor officials at the May 12 hearing. In California, where Diaz practiced, a worker can get compensation of up to about $1,170 per week at the maximum. Compensation rates are also updated annually based on state mechanisms, but compensation insurance coverage in California is one of the highest in the nation.

Payments are made by the employer’s insurance carrier. GovGuam is self-insured but some agencies carry private insurance. According to data compiled by the Marianas Business Journal from the Department of Revenue and Taxation, carriers collected about $13 million in worker’s compensation premiums for fiscal years 2014 and 2015. Carriers paid about $4 million in both years.

Former Sen. Rory Respicio, who sponsored the rider that gave public employees paid administrative leave if injured on the job, said past efforts to update compensation rates met pushback from the private sector.

Lee told The Guam Daily Post that her office would be researching policy ideas and will be receiving recommendations from the labor department as a result of the May 12 hearing.

Gavras, meanwhile, is skeptical that meaningful changes will come from lawmakers, given the years without policy reform. He and Bell have both spoken about the pitfalls of the existing worker’s compensation system and while they disagree on the extent of Fullerton’s involvement in the situation, both men have used the same phrase to describe why the system remains challenged: “Nobody cares.”