Another state Supreme Court case, this time out of Ohio, has altered a state workers’ comp system. According to the ruling issued on July 20th, the Ohio Bureau of Workers’ Compensation can retroactively reclassify a company’s workforce and collect more than $1 million in back premiums, regardless of whether the employer was at fault. In Aaron’s Inc. v. Ohio Bureau Workers’ Compensation, Aaron’s Inc. (formerly Aaron Rents Inc.) is an Atlanta-based rent-to-own retailer that has done business in Ohio for more than 20 years. When the company first applied for workers’ comp coverage, the Ohio Bureau of Workers’ Compensation assigned it occupational classifications of 8044 and 8810 for furniture and clerical workers, respectively.
A routine audit found that Aaron’s incorrectly classified many workers as clerical when they were not. However, the audit was never shared with Aaron’s because it did not meet the Bureau’s quality review process. A later audit issued in 2008 contained the same findings and charged Aaron’s $2 million in back premiums for misclassifying workers dating back to 2004. A hearing limited the payments to two years instead of four, but Aaron’s filed suit. District courts upheld the Bureau’s audit, and the Ohio Supreme Court decided the same 4-3, stating that the “purpose of retroactive adjustment is to correct an error or mistake, even if the employer was not at fault for the mistake.” The dissenting opinion countered that: “The bureau does not explain why it is deviating from its internal policy of applying audit adjustments retroactively only when there is evidence of knowing or intentional wrongdoing.”
Read further coverage via Business Insurance here. Read the decision in full here: Ohio Supreme Court_Aarons v. Bureau of Workers Compensation