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Workers’ compensation fraud can be expensive for employers. One of the most common types of workers’ comp fraud is employee fraud. This involves workers who seek to receive benefits under false pretenses.
Employees have been known to commit several types of fraud to obtain workers’ compensation, including:
Employers can take the following steps to reduce the drain on their bottom line from employee workers’ comp fraud:
It is a sound company policy to perform pre-employment background checks for new hires. Your HR team should learn to spot “red flags,” such as previous suspicious injury claims, a criminal record, or a spotty work history. The background check should include a criminal record, credit history, driving record, and educational records, in addition to a workers’ compensation claims history.
Clearly communicate your company’s expectations regarding false claims. Provide employees with company anti-fraud policies in writing. Educate new hires on your zero-tolerance policy during orientation, and remind all employees each year. Make sure they understand that workers’ compensation fraud is illegal and will not be tolerated by your company.
Make it easy for supervisors and workers to report to management if they suspect employees of workers’ comp fraud. Make no accusations, but take these matters seriously and report suspected fraud to your insurance company right away.
Use the same procedures for reporting and investigating all workers’ comp claims. Document any reported work-related injury or illness. Interview the injured worker and any witnesses. Get written statements from witnesses of an injury. Take note of any comments or statements about the accident among employees. Meet with our agent to discuss company procedures for processing workers’ compensation claims.
It is important to keep in mind that most workers’ comp claims are legitimate. However, these “red flags” may indicate a need for further investigation: