Workers Compensation Fraud Still Exists


It can happen to any good business owner. You took all the right steps to make sure that you had a safe working environment, and you did everything you could to motivate staff to practice all the right safety procedures. All of a sudden, an employee gets injured in a way that didn’t really make sense. And worse still, your insurance rates skyrocket and you are automatically forced to reimburse your employee.

Believe it or not, though you never really hear of it on the news, workers compensation fraud still exists, and it can happen to you if you don’t check the evidence too carefully.

The fact is that workers compensation fraud can be a huge problem with certain industries – and it often is. Many states do not expect workers to show proof that they are injured on the job, which means that employers can be automatically faulted for a workplace injury. Moreover, it can be very easy for an injured employee to exaggerate how injured they really are. This makes it very, very easy to take advantage of the system that is in place, and if employers aren’t careful about who they hire, they may end up facing problems because of it.

The price that employers have to pay when hit with workers compensation fraud can be very high. Some employers have had to lay off employees, move to another state, pay higher premiums, and go under investigation. The matter can be compounded by doctors who may want a piece of the monetary pie that comes with a high-end workers compensation lawsuit, many repeat doctors’ visits or fraudulent receipts for medical services or medication being reimbursed. It’s easy to see how the chips are stacked against an employer who doesn’t watch out for employees that have workers compensation fraud histories.

However, there is some good news on this subject, though. Workers compensation fraud is not only preventable but fightable as well.

Many services and guides exist to help employers weed out potential employees that are at high risk for taking part in workers compensation fraud. There are also ways to fight workers compensation fraud, and asking your insurers to take part in an investigation is a quick way to help avoid the possibility of having to pay for expenses that shouldn’t really be your burden.

Another excellent way to reduce the chances of being a victim to workers compensation fraud is to make sure your employees know that you know it exists. Having a stringent recruitment process in place that includes a medical will help minimise employing someone else’s injury that could end up being a workers compensation claim in your business. Make sure that every employee knows the consequences that come with being caught in a workers compensation fraud trial. Encourage your employees to give you a heads up if they see something suspicious, and reward those who find workplace safety issues and report them.

When injuries are reported, investigate that the injury sustained was able to occur from the task that was being undertaken and not a sports or personal injury that has transpired outside of work. The more evidence you show that you are keeping tabs on your safety levels, the better off you will be if there is a need to go to court for workers compensation issues.

Changes to the NSW Worker’s Compensation Scheme in June 2012 has meant that lump-sum payments for pain and suffering are no longer available as they were previously under section 67 of the Workers Compensation Act 1987, and a threshold of over 10 per cent whole person impairment for physical injury must be reached to access a permanent impairment lump sum including for hearing loss, and hefty penalties for those caught being fraudulent that include being published, we may see a decline in workers compensation fraud.

If you are not vigilant, you could find yourself and your employees to be victims of a workers compensation fraud case. However, it doesn’t have to be this way. As long as you know the warning signs, and as long as you know your rights as an employer or business owner, you have a chance to fight against workers compensation fraud in your workplace.