An oft-heard refrain nationally in this election year is that government just needs to get out of the way and let the "job creators" in private business do their thing. And that's often true. Excessive regulation, no doubt, can stifle entrepreneurial enterprise

But, as compelling recent revelations at the state level make all too painfully clear, the opposite can just as well be the case. Corner-cutting decisions by sloppily regulated businesses can produce results for their employees that are anything but positive.

North Carolina law requires businesses with three or more employees to provide them with workers' compensation insurance to cover them if they should get hurt on the job. The law allows only one alternative: Companies can provide the state with a certification that they have enough assets at their disposal to self-insure.

It has now become clear, thanks to some able investigative reporting on the part of The News & Observer of Raleigh, that more than 30,000 of the 170,000-plus businesses in the state have been complying with neither of the above mandates.

Institutionalized Cheating

For example, some companies with far more than three employees get around the rules by arbitrarily - and dishonestly - declaring all but one of their employees to be "independent contractors." Then they buy much cheaper coverage, a so-called "ghost policy," for the remaining one.

When the inevitable ultimately happens and workers suffer work-related injuries, companies often declare the victim to be not covered and offer to pay only a token amount, if anything. As a result the worker is either stuck with paying an exorbitant medical bill or pursuing costly legal action against his or her former boss.

Here's where the government comes in - or should. But it seems pretty clear that the N.C. Industrial Commission, which is supposed to oversee such things, has been falling down on the job. It apparently doesn't keep track of which companies are complying with the workers' comp requirements. And it gets involved only when there is an injury - in other words, when the horse has already left the barn.

Even then, the commission typically waives the required fine or jail time if the employer works out some kind of financial settlement with the worker.

A Recipe for Abuse

This is a clear recipe for abuse. In a way, it's hard to blame some of the employers mentioned in the N&O stories for playing this system for all it's worth. In this time, especially, businesses are keeping a close eye on ways to reduce costs.

If the employers in question have learned through experience that the regulators are looking the other way, then it should come as no surprise that they would act the same way baseball players might behave if the umpire is asleep on the job. That is, to see how much they can get away with.

In this case, the solutions seem clear. The "ghost policies" should be outlawed. The Industrial Commission should start doing its job. And it should get out of its "silo" mentality and start communicating and cooperating much better with other agencies with overlapping responsibilities.

A good place to start: N.C. Department of Insurance, which shares the same Raleigh building.