A Cautionary Note to All Employers: Be Sure to Pay Your Workers' Compensation Premiums

A judge in Cuyahoga County, Ohio recently ordered Gray Container, a 55-gallon drum manufacturer, to discontinue its operations for repeatedly refusing to maintain workers' compensation coverage. The injunction against Gray Container, requested by the Ohio Bureau of Workers' Compensation (BWC), was filed to protect the company's current employees. Gray Container has appealed the ruling to the Eighth District Court of Appeals.

"This case is ultimately about fairness – fairness to the employees who deserve protection in the case of workplace injury and fairness to the 250,000 other Ohio businesses who have to pick up the tab when a worker for an uninsured company is injured," said BWC Administrator/CEO Steve Buehrer. "In this instance, Gray Container ignored repeated efforts by our staff to find a workable solution, even as multiple claims were filed by its workers."

According to the BWC, Gray Container allowed its policy to lapse in September 2006 and, despite repeated attempts by the BWC to assist the company to maintain coverage, it failed to protect its employees. During that time, 22 claims, one of which was a death claim, were filed, and Gray Container now owes the BWC almost $700,000. Ohio law ensures benefits for the injured workers even if the employer is without coverage.

The company's owner, Anthony Gray, previously pled no contest to felony failure to comply with workers' compensation laws. Gray was sentenced to one year of probation, 80 hours of community service, and a 90-day suspended jail sentence. He further agreed to make a lump sum payment, make monthly payments, and continue to report payroll and pay premiums in a timely manner. Gray failed to meet any of these arrangements.

This is a situation rarely seen since the overwhelming majority of employers pay their workers' compensation premiums on time as required. Hats off to the Ohio BWC for pursuing this entirely warranted action against a company that clearly put its own interests ahead of both its employees and its responsibility to other employers in Ohio that participate in the state fund.
As developments arise regarding this case, Roetzel & Andress will provide further information and guidance to assist you. Please contact any of our offices to discuss this matter further with one of our workers’ compensation attorneys.


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