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Workers comp: Fraud Through the Roof
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Workers comp: Fraud Through the Roof

In the annals of workers comp fraud, the class code of roofers often provides the headlines. It's not difficult to figure out why: the roofing class code in MA (5545) carries a whopping rate of $37.05 per $100 of payroll. That's over a third of a company's payroll, assuming that their experience mod is below 1.0. If the mod drifts upwards, they could easily owe 50% of their payroll for this mandatory coverage. (That being said, the pool rate for roofers in CT is $60.24 per $100 of payroll!)

Meet the Carons of Fall River MA. This husband and wife team runs a family construction business that specializes in roofing. Judging from the reviews, they do a great job. However, according to Attorney General Maura Healey, the Carons have conspired to avoid comp premiums by classifying their workers as carpenters. Simple math explains why they did this: the rates for the various carpenter classes in MA range from $8.11 to $11.00 per $100 of payroll - less than a third of the roofer rate. While the Carons told insurers that they were general contractors employing carpenters, their web reviews make it clear that they are in business only to install roofs. The Commonwealth has charged the couple with fraud, to the tune of $71,000+ in avoided premiums.

This crime is not without its ironies: residential house framing involves similar height exposures for both roofers and carpenters: both trades operate high off the ground. But carpenters are only exposed to these heights for a relatively short time; roofers are always up on the roof. It is this constant exposure to falls from a height that drives the cost of coverage for roofers. And this coverage, in turn, occasionally tempts business owners to misclassify their workers. As the Caron saga makes clear, this premium avoidance strategy is illegal, with potentially severe consequences for those who are caught.


Jon Coppelman


Senior Workers Compensation Consultant

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