What is workers’ compensation fraud and how can you identify it?

On Behalf of | Aug 4, 2021 | Employment |

Most employees in California who suffer injuries or illness on the job are entitled to claim workers’ compensation. While most claims are legitimate, there may be times when workers’ compensation fraud exists. It’s important to know more about this and how to identify it.

Who can commit workers’ compensation fraud?

State law requires any and all workers’ compensation claims to be legitimately filed. In other words, an employee who has sustained an on-the-job injury or illness has the right to file a claim. Unfortunately, sometimes, there may be an issue of workers’ comp fraud.

Both employees and employers can commit workers’ compensation fraud. When an employee does it, it’s to collect benefits they are not due while they are not going in to work. Employers sometimes commit workers’ comp fraud so they can pay less for insurance coverage.

What are examples of workers’ compensation fraud?

There are numerous ways that an employee can commit workers’ comp fraud. Per state law, both slightly exaggerating about an injury or illness or outright lying altogether can constitute fraud. For example, a worker who suffers an injury outside of work but who claims they sustained it at work would be considered as committing workers’ compensation fraud. Likewise, a worker who claims to have been injured at work but is seen by their employer engaging in some type of strenuous activity such as sports would also be guilty of fraud.

If an employer lies about the number of employees in their company to save money on paying insurance premiums, that would also be considered workers’ comp fraud.

How to identify workers’ compensation fraud

Workers’ compensation fraud can cost businesses an average of $30 billion each year. If an employer suspects that workers’ compensation fraud is being committed by employees, there are certain things to look for, including the following:

• Employees who claim to have been injured or gotten ill on the job are required to immediately report it to their supervisor and give details. If the person’s story changes over time or doesn’t make sense, it should be considered suspicious.
• Checking security cameras can back up or disprove an alleged injury sustained on the job.
• Talking with witnesses or the person’s coworkers can be telling. If they have consistently different stories than the employee, it should be a red flag.

Workers’ comp fraud is serious. It can significantly impact a company’s finances and cause a lot of stress. If there is a case of fraud, it should be reported immediately.