Employee Fraud Can Jeopardize Business Profits

October 08, 2015
Sacks & Zolonz, LLP
Employee Fraud

Business owners in California provide workers with the peace of mind in knowing that they are entitled to financial relief in the event of a workplace accident. Nevertheless, companies typically have to be on the lookout for workers who take advantage of the fact that the workers’ compensation system is a no-fault program. Unfortunately, employee fraud is prevalent, and companies must be careful to safeguard against this form of abuse.

Workers’ compensation scams can be committed by employees filing bogus claims, administrative staff stealing premiums, or dishonest doctors taking advantage of the compensation system. Free money is the typical motivation to commit insurance fraud. In some cases, employees start their own businesses or take on second jobs while claiming to be unable to work after suffering a workplace injury. Some workers have often been found to participate in all kinds of sports and hobbies while collecting insurance benefits that are based upon their inability to return to the workforce.

Fraud can include exaggeration of minor injuries — or even faking injuries — in order to spend longer periods off work while collecting compensation. Injuries that are suffered away from work, such as sports injuries, are sometimes claimed as work-related injuries. In cases in which workers have an old injury, it is not uncommon for those injuries to be misrepresented as new injuries on benefit claims.

Unfortunately, employee fraud presents an enormous threat to the financial stability of companies. Workers’ compensation scams force companies to pay higher premiums, adversely affecting business profits, and may ultimately jeopardize the jobs of honest workers. Some company owners in California retain the services of experienced workers compensation attorneys to analyze claims for signs of fraud and protect their businesses by taking legal action against employees who commit insurance fraud.

Source: insurancefraud.org, “Workers compensation scams”, Accessed on Oct. 7, 2015

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