Cyber Currency in Workers Comp Defenses When the IW has launched a Gig

The current labor crunch has been exacerbated by a full year of potential employees launching their own businesses via the GIG Economy. Many employees are launching their own business in lieu of going back to work, sometimes after submitting a workers comp claim as a method for funding the launch of their gig. The gig boom has been super-charged by the use of cyber currency.

Cyber currency (a la Zelle, Cashapp, Venmo, etc) allows people launching a gig to accept credit card and bank transfer payments via a phone app, effectively bypassing the need for a merchant credit card processing bank account. This simple change affects whether or not a gig owner files for a tax id number, a business name filing, and so on, because in the past all of this documentation was required in order to open a merchant banking account, and a merchant account was the only way to accept credit card payments.

With the rise of the gig economy, cyber currency is used extensively as a measure of value in exchange for goods. The transaction is quick and easy — a nano second with no need for accounting practices or IRS involvement. We now find ourselves headed into a cash economy with app transactions instead of physical cash.  The key to developing worker’s comp defenses in this gig economy is to look early, often, and communicate in real time about the claimant.

Social media is the key to unlocking employee earnings and skills potential from their gig posts. People launching a gig business can advertise on social media for free – this is where “look early” comes in.  If you have an inkling your plaintiff may be considering launching a gig business, start watching social media immediately to catch these “launch” ads.  Once launched, most gig business will continue to use social media to launch new products, to publicize pop up store events, or schedule future event dates. This is where “check often” comes in.  Frequent social media viewing allows the documentation of the viability of the business over time when tax records are not available.

When building a defense, also consider the transaction logs from the various cash apps. For instance, if a plaintiff launches a homemade jewelry business and advertises it on Facebook, displaying their necklace inventory available for $19.25 each.  Then they indicate they have a booth at the craft fair being held at a local elementary school.  It would be useful for counsel to subpoena the plaintiff’s Venmo records to look for sporadic transactions of $19.25. If there are several transactions for $19.25 during the hours of the craft show, and on other dates that correspond with social media advertisements, it can reasonably implied in the context of W/C that the plaintiff has a residual earing capacity. In the context of a casualty claim, counsel now has a data trail that can be used to contest the income specials to be blackboarded at trial.

Patrice Toland, a workers’ compensation defense attorney with Post & Schell, is a customer of Fraud Sniffr.  She has seen these practices in real life applications, noting that real time communication about these matters is critically important in order to bring all the moving pieces together to form a successful defense.  All SIU information developed over the course of the claim is stored in the Fraud Sniffr data repository for storage, and those invited to the repository can see this data. Claims adjusters, attorneys and IME providers can all be invited to the claimant’s account in the Fraud Sniffr system, allowing 24/7 access to the data and the ability to update the information as often as they like through the system. This 24/7 real-time access allows for the development of effective defenses while allowing for the weekend or after-hours access often required by work from home employees.

Cyber currency in a new challenge but, if you embrace the new technology and check early and often, developing defenses to address this challenge are not that difficult as long as everyone is on the same page.