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December 6, 2000

Wal-Mart's privilege to manage workers' comp benefits revoked

TUMWATER - For the first time, a major employer is losing its privilege to manage its own workers' compensation program for not paying proper benefits to its injured workers.

The department of Labor & Industries announced today that on March 15, 2001, it would begin managing Wal-Mart Stores, Inc.'s, more than 300 currently open claims. Wal-Mart has been self-insured since 1993.

"When workers in Washington suffer injuries, they deserve their benefits," said Gary Moore, the agency's director. "For the past seven years, our audits continue to show Wal-Mart has fallen far short in meeting self-insurance requirements under Washington law."

Labor & Industries found Wal-Mart was preventing many workers from receiving benefits they're entitled to when they are injured on the job. Some workers have not received payments for wages they lost as a result of their injury. Benefits can include medical expenses, partial wage replacement, pension and vocational services.

"We've provided training here and at Wal-Mart operations in Arkansas. We've taken corrective action and issued penalties," Moore said. "We've met with Wal-Mart staff many times. We've told them what they need to do. Despite our efforts, despite their promises, they've missed the mark. That's why we're taking this action today."

Under Washington law, about 400 large employers are allowed to provide their own workers' compensation coverage for about 800,000 workers. Labor & Industries has oversight authority. The department also insures nearly all of the remaining 163,000 employers and about 1.9 million workers.

Wal-Mart workers injured on or after March 15 also will have their claims managed by L&I. And, as is the case with the other state-insured employers, Wal-Mart will begin paying industrial insurance premiums to the state.

The department estimates Wal-Mart will pay about $1 million a quarter in premiums. Wal-Mart reported it paid about $1.5 million in claims costs last year. It also paid the department more than $700,000 in assessments.

Wal-Mart has nearly 8,000 workers in Washington. Its workers filed 888 claims in 1999 and 772 claims in 1998. However, because of Wal-Mart's consistently poor record keeping, Labor & Industries cannot be sure how many claims never were filed.

Some of the problems with Wal-Mart's workers' compensation program that led to today's action include:

  • Repeated failure to allow injured workers to file an accident report. Filing the accident report starts the claim process.
  • Failing to recognize injured workers' rights to time-loss compensation.
  • Failing to pay time-loss until directed by the department.
  • Unreasonable delays in making initial time-loss payments and continuing those payments.
  • Prematurely and inappropriately terminating time-loss compensation to injured workers.

Since 1994, the department has issued Wal-Mart 66 penalties totaling more than $31,000. Those penalties primarily were for delaying time-loss payments to injured workers and failing to accept or deny a claim within 60 days, as required by state law.

Wal-Mart Stores, Inc., based in Bentonville, Arkansas, has 27 locations in Washington, including two Sam's Club stores and McLane Trucking Company, Inc.

In the past, Labor & Industries has decertified employers for insufficient funds, "but this is the first time we've had to decertify an employer for not properly taking care of injured workers," Moore said.

To qualify as a self-insurer for workers' compensation, employers must be in business more than three years, have an effective safety and accident prevention program, a net worth of at least $5 million, and a surety bond large enough to cover potential benefits.

Wal-Mart Stores, Inc., has 60 days to file an appeal with the Washington Board of Industrial Insurance Appeals.

Workers who have a concern or complaint from an injury incurred while working for Wal-Mart should contact the Labor & Industries' Self-Insurance program at 360-902-6901.

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