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Employers should be careful about cutting insurance coverage

With the pressures of the economy, many California employers have naturally had to cut costs. Such cutbacks include reducing the number of employees and cutting back on benefit packages. A struggling economy has forced many employers to make the hard decisions to make the cuts, while still trying to keep as many employees on staff as financially possible.

At the same time, according to a recent poll it appears that working conditions may have gotten worse, at least for some employees in certain industries. On the other hand, half of all respondents said that working conditions were not worse than they were in prior years.

What matters, however, is whether an employer is in compliance with state employment laws, such as carrying workers' compensation insurance. So long as the employer has abided by all safety requirements, then doing more with less may just be a symptom of the underperforming economy.

Because there are simply fewer jobs out there and more applicants, employers can rightfully expect more from their employees in terms of responsibilities. Working longer hours for less pay does not necessarily mean that a job is any more dangerous, or that an employee is more likely to suffer an injury.

One way that employers, however, may be willing to cut costs is by failing to obtain workers' compensation insurance for its employees. This is against the law in California and can lead to criminal prosecution. If only one employee files a disability claim, then the employer can become subject to a lawsuit because they do not carry a workers' compensation insurance policy. The consequences facing an uninsured employer are serious and can force a successful business to close its doors. However, employers should take all necessary measures, including seeking the advice of a knowledgeable attorney if a legal claim arises.

Source: Los Angeles Times, "Workplace conditions are worse for many, poll finds," Alan Semuels, May 31, 2012

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