Employers are required to carry many types of insurance. One of these insurance plans is Workers’ Compensation which pays employees for injuries sustained on the job until they can return to work or qualify for permanent disability. Unfortunately, there is fraud tied to this insurance which can cause increased premiums and lengthy investigations for everyone. To best avoid fraud, it is important to know what some of the types are and how to spot them.
Employers Misclassifying Employees
Employers are not required to carry workers’ compensation insurance for some classifications of employees such as freelancers and independent contractors. Some will use this to their advantage and commit workers compensation fraud by misclassifying their full or part-time employees as one of these types. To avoid this, it is important to understand what the laws and regulations are around classifying someone as a freelancer or independent contractor on the local, state and federal level. If you have been misclassified, there are ways to report this and keep yourself safer.
Employers Lying About Safety Issues
The fewer safety issues a place of employment has, the lower the premiums for workers compensation insurance are likely to be. This encourages employers to enact safer policies for workplace maintenance and required safety equipment. For instance, a restaurant requiring non-slip footwear for staff and having a strict floor maintenance policy can reduce the number of slip-and-fall accidents for staff and customers. If the restaurant lies to the insurance company about floor repairs or regularly checking employee footwear, then it is committing fraud. Avoiding this can be as easy as performing routine maintenance and checks on safety issues to ensure that they are in line with what the insurance company expects.
Selling Fraudulent Medical Claims
Malicious actors can hire healthy employees to file fraudulent workers comp claims. Sometimes these actors are medical professionals or those claiming to have a medical license, and sometimes they are intermediaries. In most of these cases, insurance companies have been charged for tests, treatments or surgeries which have not been performed and the groups involved pocket the money. This type of fraud can be more difficult to avoid, but you can stress to your employees that it comes with hefty fines and sometimes even jail time.
Using Fake Injuries To Get Time Off
Even if you do everything right as an employer, and your employees are careful, accidents can happen which result in injuries, long-term illnesses or even death. However, an unethical employee may turn a simple fall into a painful and expensive back injury or fake a fall entirely to get paid time off. Investigators use things like social media posts, doctor visits and other criteria to determine if a claim is valid and are quick to press charges if it is not. You can avoid this type of fraud by carefully screening candidates for a history of workplace injuries as well as by designing a benefits package with input from your employees.
Even the most ethical of employers can experience fraud either through an accidental omission, malicious actors taking advantage of them or ignorance of the laws and regulations. To avoid these types of fraud, and the lengthy investigations they cause, it is a good idea to know what some common forms are and how to spot them.