Workers’ compensation fraud is largely a myth

On Behalf of | Mar 6, 2018 | Blog, Firm News |

When people defraud the workers’ compensation system, it tends to make headlines. Take a recent example of a man from Raleigh who defrauded insurance companies out of nearly $150,000 for false workers’ comp claims. There are numerous stories similar to this one to the point where one would expect fraud to run rampant. This myth allows employers to be skeptical of any employee who files a claim, believing the worker is exaggerating the injuries. However, fraud occurs extremely seldom. 

According to ABC News, between one and two percent of all workers’ comp claims are fraudulent. However, if you asked employers what they believed the percentage was, they would likely tell you something much higher. It is vital for employees and employers alike to separate fact from fiction so that anyone injured on the job can get the health care he or she needs. 

Why does the myth persist?

Although statistics show that workers’ comp fraud is rare, many employers will bring up anecdotal evidence to support their beliefs. The man who defrauded insurance companies out of $150,000 in the story above is a good example. If an employer were on the hook for that case, then he or she would have needed to spend $150,000 out of the company’s account. Employers have a vested interest in making sure no one takes advantage of the system. 

Employer fraud

Workers’ comp fraud on the employer’s end is also very rare, but it does happen. The media typically does not discuss it as often, but it is vital for employees to be aware if they have a boss who seems to take advantage of the system. For example, one type of fraud is for employers to misclassify employees. Some business owners make employees 1099 independent contractors, which means they do not qualify for certain benefits, such as filing for workers’ comp if injured on the job. It is important for workers to watch out for signs of fraud in case it appears at their places of employment.

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