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Avoid Labor Fraud | Stubbs Insurance Associates, Inc.



Employment compensation fraud can be costly for employers. One of the most common types of employee scams is scams. This involves workers trying to get benefits under false pretenses.

How do employees engage in workers' comp fraud?

Employees have been known to commit several types of fraud to obtain workers' compensation, including:

  • Injury outside work : An employee is injured on his own time but claims he was injured at work so he can collect workers' compensation benefits.
  • Incorrect statement : The reported work-related injury never occurred, or it may have been arranged by the employee.
  • Exaggerated statement : A worker who received an occupational injury exaggerates its severity in hopes of qualifying for more benefits.
  • Working while collecting benefits : An employee who is considered unfit to work after a work-related injury can work "under the table" for someone else while collecting workers' compensation benefits.

How can companies reduce labor fraud?

Employers can take the following steps to reduce the drainage level of employee company fraud:

Hire only reliable people

It is a sound company policy to perform background checks on new employees prior to employment. Your HR team should learn to detect "red flags", such as previously suspected claims, a criminal record or a tainted work history. The background check should include a criminal record, credit history, driving record and education record, in addition to a history of employee compensation.

Set a Zero Tolerance Policy for Labor Fraud

Clearly communicate your company's expectations of false claims. Provide employees with written anti-fraud policies. Educate new employees about your zero tolerance policy during the briefing and remind all employees each year. Make sure they understand that workers' compensation scams are illegal and will not be tolerated by your company.

Establish a Fraud Reporting Process

Make it easy for supervisors and employees to report to management if they suspect employees of workers. comp fraud. Make no accusations, but take these issues seriously and report suspected fraud to your insurance company immediately.

Compatible with procedures

Use the same procedures for reporting and investigating all workers' compensation claims. Document reported work-related injury or illness. Interview the injured worker and any witnesses. Get written statements from witnesses about an injury. Note any comments or statements about the accident among employees. Meet our agent to discuss the company's procedures for handling employee compensation claims.

What are some "red flags" for a fraudulent workers' compensation claim?

It is important to remember that most workers' compensation claims are legitimate. However, these "red flags" may indicate a need for further investigation:

  • An employee has a history of filing multiple claims.
  • The worker's account of the accident is vague, contradictory or "does not hold water".
  • The reported damage occurred shortly before termination, notice, strike or end of project.
  • There are no witnesses to the accident.
  • The employee refuses diagnostics to confirm the nature and extent of the injury.
  • The injuries occurred late on Friday afternoon or early Monday morning (this may indicate that the injury is not work-related).
  • The injured employee has participated in work or leisure activities in addition to the alleged physical limitations.

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