Governor Urges $1B Workers’ Comp Dividend for Employers
- Ohio Governor Mike DeWine has asked the state’s Bureau of Workers’ Compensation to issue a $1 billion in dividends to roughly 250,000 public and private employers, with the bureau’s board set to vote on the proposal August 28.
- If approved, total dividend payouts during DeWine’s eight years in office would reach $10.2 billion, meaning the average participating employer would receive more in dividends than it paid in premiums over that span.
- The proposed payment would equal roughly 90% of premiums paid in policy year 2022 and would mark the fifth major dividend the bureau has issued since DeWine took office in 2019, made possible by strong financial management and investment returns.
- Employers who haven’t completed their 2022 policy year “true-up,” reconciling estimated payments with actual payroll, or who are in lapsed-payment status have until Aug. 28 to fix those issues or risk missing the dividend.
- The bureau’s premium rates are currently at a 65-year low, driven by a years-long decline in workplace injuries and lower-than-expected medical costs.
State Reaches $2.8 Million Settlement in Worker Misclassification Lawsuit
- New Jersey Attorney General Jennifer Davenport and Acting Labor Commissioner Kevin D. Jarvis reached a settlement with STG Logistics and related subsidiaries over allegations the trucking company misclassified hundreds of drivers as independent contractors, marking the first case resolved under New Jersey’s 2021 law allowing the state to sue employers over misclassification.
- Truck drivers will receive $2.22 million in back wages, primarily for wage and hour violations, while the state will receive $555,000 in penalties and fund contributions, with an additional $7.5 million in penalties owed if STG violates the agreement going forward.
- The settlement survived STG’s bankruptcy filing earlier this year because the payments were classified as “priority” debts under both the bankruptcy code and the settlement agreement, ensuring workers get paid ahead of other creditors.
- The New Jersey Department of Labor and Workforce Development’s investigation, which began in 2019 against STG’s predecessor XPO Logistics, found the company deducted costs like fuel, tolls, and truck maintenance from drivers’ pay, sometimes resulting in negative net pay, while also failing to provide workers’ compensation, unemployment insurance, and earned sick leave.
- Despite classifying drivers as independent contractors, STG required company branding on trucks, exclusive truck leases, GPS tracking, non-negotiable contractor agreements, and controlled routes and pay rates, failing to meet any element of New Jersey’s “ABC” test for independent contractor status.