Authors note: Justin R. is a project manager for a mid-size construction company that operates in and around Washington D.C. His company focuses mainly on the construction of housing developments and condominiums, and as of late, business has been booming. Northern Virginia and Southern Maryland are both experiencing influxes of population, and the need for housing has become a priority.

I met Justin through a mutual friend at a dinner party, and as the evening progressed our conversation turned towards our respective occupations. As a longtime resident of Northern Virginia, I was fascinated (and a little concerned) by the near constant construction that is taking place all over the area, so I asked him questions about his business.

As a project manager, the majority of Justin’s time is spent on the job site. That means he is in charge of making sure that the project has enough men to do the job and is proceeding according to schedule. It is also his responsibility to make sure that the project is operating correctly under any state or local regulations with regards to labor rules and insurance.

Justin told me some interesting things about workers’ compensation insurance and it was at that point that I asked if I could interview him on the record. He agreed, but only under the condition that I not reveal his name or the name of the construction company that employs him.

AD: How many people would you say your company has working at any given time?

JR: I can’t speak for the whole company, because we have several projects going on at once, but at the site I’m currently on we have about a hundred guys. Its split evenly between skilled workers and unskilled.

AD: What does that mean?

JR: Well, a skilled worker would be an electrician or a carpenter, while an unskilled worker would be one who doesn’t have a specialized skill, but contributes to the job by doing heavy lifting, digging, clean up, that sort of thing.

AD: What sort of job are you currently doing?

JR: We’re building a condominium complex that goes about four stories up. Actually, “building” isn’t really the word. It’s more like we’re “assembling” them. Lots of these townhouses and even houses these days are prefabricated, so we just get the parts and put them together.

AD: Are you paying union wages?

JR: If we’re in Virginia we don’t have to. Virginia goes under “right to work” laws, which basically means that they don’t see the need for union workers. In Maryland and in DC they definitely have Unions, so you pay the standard wages and overtime and all that. But we pay the same wages in Virginia, anyway.

AD: Why do you do that if you don’t have to? Couldn’t you, theoretically, just go ahead and pay workers in Virginia less?

JR: We could, but we don’t. Word gets around. It would make us look pretty bad.

AD: So regardless of whether you are in a Union state or not, you pay Union wages?

JR: That’s what we do.

AD: With regards to workers’ compensation insurance, would you say that you are satisfied with how it works?

JR: Not in the slightest.

AD: Is it because the policies are too expensive?

JR: Well, they are expensive, but we basically pass those costs on to the developer or whoever is putting up the cash to build the property.

AD: Is it the fact that you are forced to buy these policies?

JR: No, that doesn’t bother me at all. Construction is serious labor, you know. Its lifting heavy objects, it’s climbing on scaffolding and ladders, or being around blades, hammers and heavy machinery. Injuries are pretty commonplace in this line of work. So we pay those policies faithfully. We’d do that even if we weren’t required to by law.

AD: So what is the problem with your workers’ compensation insurance?

JR: My main problem is that it’s useless to the guys that need it.

AD: What does that mean?

JR: We learned the hard way that when one of our guys gets injured on the job, that’s no guarantee that he’s going to get his benefits.

AD: You mean they get their claims rejected?

JR: Sometimes. But mostly they give these guys the runaround. Every single time. There is always a “second opinion” they have to get, or paperwork, or tests or costs that have already happened that they say were “unnecessary.” It’s ridiculous.

AD: So your workers have to deal with out of pocket costs themselves?

JR: Well, it usually takes so long for the insurance company to approve anyway. And the medical bills start showing up at the injured guys house for all the tests that the company rejected, and that usually puts guys in the hole. And in a state of panic, to be frank with you. So then they have to get into an argument with the insurance company, and that takes months. It’s just a joke.

AD: But you are required by law to purchase your policies. Shouldn’t this be regulated?

JR: It is regulated, but there isn’t any law that makes it efficient or fair. It’s just this company cutting corners so they can make more money. And they’ve been making a ton of money off of us lately, I can tell you that.

AD: Is this because they have been denying lots of your claims?

JR: No, it’s because when it comes to a lot of the injuries, we’ve been bypassing the insurance company altogether. We figured out that it just isn’t worth it or fair to our guys to deal with them.

AD: What do you mean “bypassing?”

JR: Well, we’ve been lucky in that we haven’t had a serious injury in years. And by serious injury I mean and injury that is not recoverable. Say, a guy loses a leg or finger or something. That hasn’t happened to us in a long time. But we do get out fair share of sprains and broken bones, or a guy will throw his back out or something.

AD: So you don’t even tell the insurance company when that happens?

JR: No. It’s not like we’re trying to get cheaper rates or anything, because the rates will rise no matter what. But when a recoverable injury happens at our site, I just end up driving the guy to the hospital with the company credit card, and I pay for his treatment on the spot.

AD: Are you supposed to do that?

JR: Probably not. But what are the options? What happens when we fill out the paperwork and all that and then get told “Sorry, not our problem?” And our guy gets hit with these bills that he can’t pay?

AD: But isn’t workers’ compensation supposed to cover his salary?

JR: We just keep him on the payroll until he’s well enough to come back to work or until the job is over. We send checks to his house just like usual, and pretend that he’s on the job. So basically we pay for his medical bills and keep his salary coming, even though it’s the Workers’ Comp that is supposed to do that.

AD: What would you do if there was a serious injury?

JR: Well, in that case, we would report it. But we would make sure the guy had a really good lawyer on his side. Because we know that the insurance company has some pretty good ones.

AD: Do you think it’s fair to have to pay both policy costs and medical costs?

JR: No. And these are the sort of costs that gets passed on to everyone, from the developer to the person that ends up renting or buying later on.

AD: Does everyone else do this?

JR: We’re lucky in that we can afford to. I know some other companies do. Some don’t. A lot of the smaller builders that bring five or six guys to a site can’t afford that. So they buy the policies and take their chances and hope that they don’t have to actually use it.

AD: So what you are telling me is that you are spending thousands of dollars a month on policies that you won’t actually use, even though you are supposed to?

JR: Right.

AD: That’s insane.

JR: Yeah, well, it’s the law. The state forces us to pay them, but they don’t force them to pay our guys when they get hurt, unless they are willing to sit through months of trials and hearings and paperwork and rejections. And by that time the guy owes thousands of dollars to one hospital or another, and has lost about two weeks or so of income. For unskilled construction guys, two weeks salary means a lot. And the system is so polluted and slanted in favor of the insurers that the law basically allows the insurance companies to assume that everyone that gets injured is just lying and trying to rip them off. It’s pretty absurd.

AD: Would you have any advice for someone who gets injured on the job and needs to file a claim?

JR: Get a lawyer. Quickly. We have yet to file a claim for our workers that wasn’t disputed or rejected in some way. If you're up against an insurance company, you're gonna need one. It's sad that it has to be that way, but that’s the way it is.