Notes on the underground economy

A recent enforcement sweep of 162 restaurants found 74 of them were not providing required workers comp coverage for employees, according to the California Labor Commissioner's Office.

In all, 88 citations were issued to 79 California restaurants during the Sept. 16 statewide raids with penalties totaling $450,000 for infractions such as not paying a minimum wage or overtime pay.

The IRS estimates that across the country $345 billion in tax revenues are lost annually to the underground economy, according to a story from The Michigan Messenger.

The Michigan Messenger story is about a state Supreme Court task force that studied the underground economy with one of the justices telling the publication they hope to start a national dialog on the issue.

The task force's report mostly focuses on the impacts to taxation and child support payments in Michigan. But its authors recommend that all insurance carriers should be required to participate in a nationwide Child Support Lien Network.

The Lien Network allows for an electronic data match between people obligated to pay child support and any work comp benefits owed to them. In Michigan participation in the Lien network is voluntary for insurers, according to the report.

I recently reported in a Business Insurance story that investigators across the county have seen a recent spike in comp claimants illegally working a second job while allegedly too disabled to return to the job where they reported an injury.

The BI story is available here and Comp Time suspects that type of fraud is spiking perhaps because more employers are trying to weather the recession by not paying comp premiums. But that is only my guess.

Meanwhile, please note I will not be blogging for the next week or so. My wife and our new dog named Max will be spending a few days in an old Forest Service ranger's cabin located between the Frank Church River of No Return Wildness and the Selway-Bitterroot Wilderness in Idaho.

There is no cell phone or internet reception anywhere near there.