Workers compensation is a federal program that requires employers to pay for medical and compensation benefits if their employees become injured or disabled while working at your place of employment (each state has its own set of workers’ comp laws). Work injuries can be anything from carpal tunnel syndrome from repetitive mouse/computer use to hurting your back during a fall on company property.
The workers’ comp laws were put in place to provide the injured workers with fixed monetary awards to help prevent litigation and give the employees and their dependents a chance to stay afloat financially while being out of work.
Oftentimes, employees commit fraud by abusing the workers compensation system to the tune of $30 million annually. You may ask why the employer should care if insurance pays for it, but think of it this way: False and/or multiple claims will drive up the company’s health insurance rates for everyone astronomically. It is always better to minimize the risk of fraud if you are an employer in order to keep costs down across the board.
Your basic workers’ comp insurance typically provides five basic benefits for your employees if they are injured on the job: Medical care, temporary disability benefits, permanent disability benefits, supplemental job displacement benefits, and death benefits. All of these payouts are useful and necessary if your employee has been legitimately injured on the job. But how do you know if their claims are real or fake?
The workers’ comp fraudsters usually fall into three distinct categories:
- Fake injury
- Exaggerated injury
The first, fake injury, is if someone has faked an injury and is claiming that he or she was hurt while on the job when in actuality, they were not hurt at all. Red flags for this kind of claim is if the person was by him or herself and there were no witnesses to the alleged injury.
The second, exaggerated injury, is when a worker may have suffered a minor but legitimate injury but then manufacturers additional symptoms in order to file a claim.
The third, malingering, is when an employee has a real injury but continues to claim that they cannot work months after they were healed.
If you suspect any of these in your employees, here are some basic things you can do to prevent workers’ compensation fraud.
- First, make sure that your place of business takes safety very seriously! Workplace safety should be a top priority for any business – check with Human Resources or the management team to see if a comprehensive safety plan is in place. It might also be a good idea to have legally authorized video surveillance available to keep honest people honest.
- Perform comprehensive background checks on potential employees to sift through those who have a history of filing workers’ comp claims in the past. A history of multiple claims should be a red flag that the person may be up to no good. Be sure to always check those references as well.
- Investigate each claim immediately, especially those made on Monday mornings or if there were no witnesses to the injury. Often injuries are sustained over the weekend and the person happens to “injure” themselves at work on Monday morning so that the workers’ comp system can pay for it. Have your procedures in place on how to investigate such claims upfront so you can get ahead of any weekend or solo injuries.
- Don’t leave your injured workers alone during the process. Their immediate manager or supervisor should help them navigate the process since they have a working relationship, including going to doctor’s appointments and reaching out to the employee while he or she recuperates. This shows the worker that they are indeed wanted back at work, gives the supervisor an idea of how long recovery will be, and prevents the person from experiencing any malingering symptoms.
If you suspect someone is abusing the workers’ comp system, you have several options.
You will need to report your suspicions to the supervisor and your insurance carrier so that they and any local law enforcement agencies can investigate the claim. This would include reviewing any security or video footage that may be available to you from the company.
If this is not available, you may have to hire someone to follow, watch, and catch the employee. According to Manhattan private investigator Darrin Giglio, “Video surveillance by a private investigator produces hard evidence that the employee is actually fit to work.” If you obtain such a video, you now have proof that the employee is actually able-bodied and definitely committing fraud.
Another great way to check up on someone is to check in to their social media to see what they are really up to. If an employee is posting pictures of windsurfing and running marathons, then he or she obviously doesn’t have an injury at all.
Bottom line, make sure you have resources and procedures in place to prevent workers’ comp fraud before it even happens.