Austin Business Hides Payroll, Ordered to Pay $250K to Texas Mutual
February 22, 2012 1 Comment
The court sentenced Hernandez to six years’ deferred adjudication and 100 hours of community service. It also ordered him to pay $250,000 to Texas Mutual and a $2,500 fine.
Hernandez operated A & R Interests, Inc., a temporary employment agency in Austin.
A & R obtained workers’ compensation insurance through Texas Mutual from February 6, 2004, to July 2, 2007. During that time, Hernandez was involved in a scheme to conceal the number of employees and annual payroll of A & R Interests, Inc. from Texas Mutual.
Because workers’ compensation insurance premium is based in part on payroll, such a scheme results in a business paying less premium than it actually owes. By paying less premium, an employer can gain an unfair advantage over competitors.