When an employee gets hurt or sick due to an incident on the job, he may be able to file a workers' compensation claim with your company's insurance to get money for his troubles. Unfortunately, employees may sometimes make up accidents, exaggerate injuries or otherwise make false claims. You can usually report suspected workers' comp fraud to your state through an online form or a workers' compensation fraud hotline. This allows the state to investigate the claim and take action against the employee if necessary.
Identifying Worker's Comp Fraud Signs
A false workers' compensation claim from one of your employees can come in many forms. Some examples include:
- Claiming a sudden work-related incident without sufficient medical documentation or witnesses
- Falsely attributing an injury from home to something that happened at work
- Overstating the severity of an injury (e.g., claiming a broken back when really a sore muscle is the issue)
- Reporting a work-related disability but appearing to continue all everyday activities without issue
- Failing to report a work accident promptly or not communicating with the employer
- Giving a story that changes frequently or seems suspicious
Reporting Workers' Comp Fraud
To report a false workers' compensation claim that one of your employees has made, you'll want to find your state's department that deals with workers' compensation or insurance in general. Once you locate the state department website, you'll usually see a section devoted to insurance fraud along with instructions for filing a report through an online form, by phone or by mail. You can often file the report anonymously to protect your privacy.
Regardless of which reporting method you choose, you may get asked to provide the following information about the claim:
- Type of fraud you suspect
- Your name and contact information (may be optional)
- Permission to get contacted by an investigator
- Name and address of the employee who made the false workers' comp claim
- Reasons you suspect the claim is fraudulent
- When and where you saw evidence of the fraud
- Names of any witnesses you think may have also seen evidence of the fraud
Understanding the Investigation Process
After you report workers' comp violations, an investigation will begin if your case seems valid to the state. If you agreed to have an investigator contact you, be prepared to provide more information to back up the claim and report any new evidence. The investigator might use means such as surveillance, medical record checks, interviews with those who are associated with the suspected employee and other evidence-gathering techniques.
If the state finds that the employee indeed filed an untruthful workers' comp claim, the state may charge the employee with a felony. This can lead to a hefty fine as well as jail time, and exact amounts and lengths will vary by state. For example, Hansford Law Firm reports that false workers' comp claims in Georgia can result in up to a year in jail and between $1,000 and $10,000 in fines for the dishonest worker.
Reducing Fraudulent Workers' Comp Claims
While an employee can always choose to be dishonest, your company can take a few steps to try to reduce false workers' comp claims. You can take a proactive approach and make sure to do thorough background checks on employees to weed out those who may seek to commit fraud.
Employees who get hired should know what the process for filing a workers' comp claim looks like, which evidence they'll need to back up their claim and when it's appropriate to make a claim. You can also educate all employees on the penalties for false workers' comp claims, offer a way to make anonymous reports and foster a workplace where you show zero tolerance for such fraud.
- Law Offices of Nathaniel F. Hansford: What Are the Penalties for Filing a False Workers’ Compensation Claim?
- Ohio Bureau of Workers' Compensation: Reporting Fraud
- Assurance Agency: 15 Simple Ways to Detect Workers’ Comp Fraud
- Patriot Software: What Is Workers’ Compensation Fraud?
- Pennsylvania Office of Attorney General: Private Citizen Insurance Fraud Referral
- Pennsylvania DLI: Report Workers' Compensation Fraud
- California Department of Insurance: Reporting Fraud
- New York State Insurance Fund: Fighting Fraud