Employer Workers’ Compensation Fraud

 Posted on February 24, 2017 in Workers' Compensation

The media often portrays workers’ compensation fraud as one-sided. The most common scenario reported is that of the employee who commits fraud by faking an injury to get benefits that they do not deserve. The reality is that less than 2 percent of workers’ compensation claims are fraudulent, with some states reporting that fraud is only evident in one-sixth of a percent of cases according to recent studies. Unfortunately, the same cannot be said for employer fraud. If you have been denied workers’ compensation, contact an experienced Illinois workers’ compensation attorney today for assistance.

The Root of the Workers’ Compensation Fraud Problem

It makes sense that the blame has been put on employees because they, as a group, do not have the resources to refute these false allegations. Employee fraud has been the focus of state workers’ compensation reforms that take away benefits for injured workers, making it easier for employers and insurance companies to deny benefits and increase their profit margins. Fraud, however, is more prevalent at the employer level than at the employee level. In fact, studies have shown that over 13 percent of employers contacted did not even have the required workers’ compensation insurance. Furthermore, a study performed by Texas Mutual Insurance Company discovered that employer fraud costs insurance companies nearly 18 times more than employee fraud. Fraud committed by the insurance companies themselves is also generally a larger problem than employee workers’ compensation fraud as well.

How is Employer Fraud Committed?

The two most common ways in which fraud is committed by the employer are:

• Employers misclassifying employees to avoid paying correct premiums: Instead of paying a higher premium for a specific worker, employers misclassify that employee as working in a safer field of work. This reduces the premiums they have to pay. Unpaid premiums cost everyone. According to Washington’s L&I Fraud Prevention and Labor Standards program, unpaid employer premiums and penalties cost $24.6 million in 2012; and
• Employers failing to purchase workers’ compensation coverage: By not purchasing workers’ compensation insurance, employers are engaging in fraud as they must legally carry it.  In failing to do so, they are passing down injury expenses to the injured workers themselves and Social Security disability. There simply is not enough punishment to discourage these cost-cutting behaviors.

Call an Attorney Today

If you were injured on the job, you deserve to be compensated. Do not get stuck with medical costs and unpaid time off that can jeopardize your future. Contact an experienced Kane County workers’ compensation attorney at Kinnally Flaherty Krentz Loran Hodge & Masur, P.C. today to learn more about how to proceed with your case. Call 630-907-0909 for a free consultation.

Sources:

http://www.claimsjournal.com/magazines/claims-review/2013/06/24/231495.htm

http://www.pbs.org/wgbh/pages/frontline/shows/workplace/etc/fraud.html