Economy's poor health leads to more sick days With fraud on rise, firms strike back

November 30, 1992|By New York Times News Service

WASHINGTON -- As the struggling economy has produce huge numbers of layoffs, significantly more of the workers still employed have been calling in sick. Many are feeling the stress of working harder, and some are abusing sick leave, using the time as added vacation days or even to look for other jobs.

Some companies are using private investigators to uncover abuses of sick-leave policies. But Trans World Airlines has gone much farther, adopting a policy that raises issues of employees' right to privacy.

In July, TWA secretly sent out forms to several hundred of its managers asking a wide range of questions about workers suspected of lying when they called in sick.

The form included questions on whether the employee had any identifying "scars and marks" and whether the worker smoked or drank alcohol. It also asked for a wide range of family information, including the names, ages and employment of the worker's children.

A copy of the form was recently sent anonymously to news organizations. Until contacted by a reporter, leaders of TWA's unions said, they had been unaware that such a form existed.

In response to questions from a reporter, the chief spokesman for the airline, Jerry Cosley, said that the company would drop most of the form but that its aggressive pursuit of fraudulent requests for sick leave would continue.

Labor experts and civil libertarians say that companies have a right to protect themselves from fraud and the losses incurred when workers stay home. Although reliable figures are hard to find, the Bureau of Labor Statistics reported earlier this month that there were 11.1 percent more reported illnesses in 1991 than in 1990. The bureau does not assess the legitimacy of illness reports.

Paul Botkin, a health-issues specialist at William M. Mercer, Inc., a personnel consulting firm, said he had seen a perceptible increase in short-term disability applications. One Mercer client, a company with 100,000 employees, reported an increase of more than 12 percent in sick-leave applications, he said.

Investigation firms, meanwhile, report a surge in business with companies that want to track down bogus claims.

Pinkerton's, one of the nation's biggest investigation companies, reports a growth in all forms of health-related fraud at companies. "It's not new, but it's increasing," said Don Walker, Pinkerton's executive vice president. "You would expect to see that in a very tight economy."

But labor lawyers and others caution that companies risk crossing the line into invasion of privacy.

Referring to TWA's form, Karen Ignagni, a health-issues specialist at the AFL-CIO, said: "There's a line of corporate propriety that's been crossed here."

Among other things, the form requests managers to supply information on the workers' physical restrictions, the names of the workers' physicians and therapists and for the dates of appointments with them.

Carrie Shattuck, a Washington lawyer who served in the early 1980s as vice chairwoman of the Equal Employment Opportunity Commission, said that keeping records of workers' medical conditions appears to be a violation of the Americans with Disabilities Act. Federal law provides little protection of privacy, but many state laws, while varying widely, are tougher.

Personnel experts see both fraudulent and legitimate reasons for sick-leave claims increasing in the current economy.

For example, they say that widespread layoffs among companies trying to survive the recession often result in added stress for the workers who are left.

Many, while fearing for their own jobs, are called upon to do the work of their laid-off colleagues. Some succumb to the stress and fall ill. Some, to get back at the boss, pretend to be sick and stay home.

"Work is not a nice place to be if you think you're going to be getting a pink slip," said Jan Douglas, an officer of William M. Mercer.

Typically, big employers allow workers 10 or 12 days of paid sick leave a year. If they do not become sick, they cannot take the days off.

Some workers, who anticipate pink slips, use sick leave to look for other jobs or as the the first step toward securing disability benefits or workers compensation. Finding a doctor who confirms that the employee is too disabled to work can make the worker eligible for compensation that, after taxes, may be only slightly less than a paycheck.

Businesses, too, have been known to resort to abuses. Facing hard times, some try to avoid paying severance by using intimidating sick-leave investigations, including questioning of friends and neighbors, to drive off unwanted workers.

The head of a Midwestern firm of investigators, who declined to be named for fear of losing customers, said: "Some corporations have a hidden agenda." He added that when a company is found to be using private investigators to harass unwanted employees, "We'll walk away."

Of major companies, few seem more susceptible to sick-leave claims than TWA. Since Carl C. Icahn bought controlling interest seven years ago, the airline has been through numerous storms with its three unions over layoffs, wage-and-benefit concessions and issues like secret monitoring of reservations clerks' telephone conversations.

To reduce huge financial losses, Mr. Icahn eliminated routes, officesand jobs, shrinking TWA to a shadow of the international prominence it enjoyed two decades ago.

In January, the company was granted the protection of the bankruptcy court, and Mr. Icahn later agreed to sell the airline to its creditors and employees. He has withdrawn from active management, and late last summer the unions and the creditors hired a new executive, Robin Wilson, to see the company through its bankruptcy.

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