Insurance Fraud Story – Employee Works for Cash, Then Gets Abandoned by the Employer

You’ve heard it all before – working “under the table”. The time honored practice of working for cash under the table. Employers love to do this because it cuts their taxes and insurance costs.

One problem – its’ fraud. A lot of companies like to use “1099″ independent contractors to get around taxes and benefits. However, the Real Estate industry  got slammed a few years ago – you can not control the schedule or actions of an independent contractor at all or else they are an employee.

Back to the bar in Fresno – they were paying a bouncer under the table.  An incident occurred and now a the drunk, raucous patron is suing.

Guess what the employer did – he threw the employee under the bus. The same employer committing tax evasion and insurance fraud continued his pattern of integrity by claiming that the bouncer was not working for him.

In this case – the California anti-business climate will actually work as the burden of proof will be on the employer. The employee will have to show cancelled checks and the like – but what a mess.

In the end, the employer is going to get hit by both the liability insurance company and the work comp company + they will get fined up to three times the premium they should have paid.

I learned in addition that the employer is a bar – with a name suggesting a restaurant. They got themselves insured under a restaurant program even there is no kitchen in the establishment.

Shame on the insurance company for not inspecting. Shame on the dirtbag that runs that place for making us all pay more to cover his fraud.

I gladly helped the person who called me about this situation – he is the attourney for the bouncer.