Trying to save on workers’ comp, temp firm now owes $20 million — Business Management Daily: Free Reports on Human Resources, Employment Law, Office Management, Office Communication, Office Technology and Small Business Tax Business Management Daily
Staffing Services, a temp agency, must pay $20 million in restitution to resolve a workers’ compensation insurance fraud case recently heard in a Los Angeles court. The repayment is one of the terms of the settlement reached between the Bellflower-based company and the state.
The California Department of Insurance (CDI) originally accused Staffing Services, its owner and chief financial officer of attempting to defraud California’s workers’ compensation fund for more than $18 million in insurance premiums. The criminal complaint said the company purposely misrepresented the types and number of workers it employed in order to pay smaller workers’ comp premiums.
The $20 million was a bargain. The defendants originally faced up to 24 years in state prison, in addition to another $40 million in fines.