Most Common Types of Workers’ Compensation Fraud

The workers’ compensation system is an essential safety net for millions of workers every year who sustain a work-related injury during the course and scope of their employment.  Workers’ compensation provides medical benefits for injured workers, as well as a portion of replacement wages.  Although the vast majority of workers’ compensation claims are valid and important to help workers get back to working condition after they sustain an injury at work, there is a small percentage that are fraudulent.  There are some types of workers’ compensation fraud that are more common than others.

One of the most common types of workers’ compensation fraud is the intentional misclassification of workers.  Under California law, an employer is required to carry workers’ compensation insurance and pay benefits only for their employees.  As a result, some employers will intentionally misclassify their employees as independent contractors, as the legal requirement to cover a worker’s workers’ compensation benefits does not extend to independent contractors.

Another common type of workers’ compensation fraud is when an employee lies about the existence of a work-related injury or greatly exaggerates the severity.  This is often seen when, for example, an employee claims a back injury is so severe he cannot possibly come to work, but then there are photos of him on social media engaging in rigorous physical activity, like skydiving or downhill skiing.  Employees found to be committing this type of fraud can face criminal charges, fines, and be required to pay back the insurance company or employer for any benefits that have been paid.

Some types of workers’ compensation fraud are actually committed by the medical providers, as opposed to the employees or the employers.  In some cases, unscrupulous medical providers will inflate medical bills or even completely manufacture them, hoping that the insurance company’s deep pockets will take care of the cost.  There have been other, much more complex, schemes for workers’ compensation fraud involving payment of kickbacks and creation of shell corporations.  One such scheme, for example, went on for fifteen years and netted one surgeon five million dollars in illegal and fraudulent kickbacks.

If you have questions about workers’ compensation fraud, call us today. Contact us today for a consultation to talk about your business.

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