Employment Law Update
September 2014
You may have recently received a Sworn Proof of Claim form from the Ohio Bureau of Workers’ Compensation (“BWC’) in regard to a $420 million refund program the BWC is administering. More than 270,000 Ohio employers are eligible to participate in this BWC refund program; however, all eligible employers must apply for a refund by October 22, 2014. In order to be an eligible employer, your company must have paid premiums to the BWC between 2001-2008, not been “group rated” during that time, and paid its premium based on certain “manual classifications.”
On July 25, 2014, the Common Pleas Court of Cuyahoga County approved a settlement reached by the BWC and plaintiffs in class action litigation that came to be known as the San Allen case. The San Allen case started in December 2007 when plaintiffs—representing a large class of BWC contributing employers—filed suit against the BWC. Plaintiffs argued that employers that qualified for membership in groups received workers’ compensation premium discounts of as much as 90%. The BWC illegally charged excessively high rates to plaintiff companies which subsidized the companies who paid lower BWC premiums based on this group-rating discount (the group rating program has since been modified and the premium savings substantially reduced).
The Common Pleas Court ruled in favor of the plaintiffs, awarding nearly $860 million in damages for excessive workers’ compensation premiums. A settlement agreement creating a $420 million fund was ultimately entered into by the parties.
The amount of the refund is based on which manual classification applies to your company, the year or years for which your company is owed restitution, and the amount of premium your company paid to the BWC in those years. If your company did not receive a Sworn Proof of Claim form, please contact our offices to discuss your eligibility. If you have received the Sworn Proof of Claim form, it is imperative that you return the completed form no later than the October 22, 2014 deadline. Your failure to do so will disqualify you from receiving a refund.
If you have any questions or would like to discuss the issues summarized herein in more detail, please do not hesitate to contact us.
