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3 Ways Employees Commit Workers Compensation Fraud

On Behalf of | May 31, 2023 | Fraud

There is no doubt that accidents and injuries happen in workplaces. It is for this reason that a vast majority of New York employers are required by law to sign up for workers’ compensation coverage for their employees. Not only is this intended to provide financial restitution to employees in the event of injuries, but to protect the business as well. 

Unfortunately, it is not uncommon for some employees to take advantage of the workers’ compensation system. Consequently, this might lead to fraudulent claims. In fact, studies show that workers’ compensation fraud cost U.S. businesses close to $30 billion annually

What is workers’ compensation fraud?

To recognize the signs of workers’ compensation fraud, it helps to start by understanding what amounts to fraud when pursuing workers’ comp benefits. Basically, workers’ compensation fraud happens when an employee willfully makes a false statement about their injuries or withholds some information while pursuing workers’ comp benefits. 

Generally, workers’ comp fraud falls into two categories – employer fraud and employee fraud. Here are three ways employees commit fraud when claiming workers’ comp benefits:

  • Falsified injuries or illness: This happens when an employee invents an injury or illness to claim financial benefits from the employer’s workers’ comp insurance carrier. An example would be a situation where an employee makes up hearing loss to seek benefits.
  • Exaggerated injuries or illness: Sometimes, an employee may suffer a slight injury at work. However, they may opt to exaggerate this for financial benefits. An example would be when an employee with a slightly sore arm inflates their injury so they can receive benefits.
  • Seeking benefits for non-work-related injuries or illness: This happens when an employee attributes an injury they sustained elsewhere to their job with the sole objective of claiming benefits. It can also happen when an employee attributes a pre-existing condition to their job.

Protecting your interests

Workers’ compensation fraud hurts businesses in a variety. If you suspect that an employee is engaging in this practice, it is important that you take appropriate action to protect your business interests. 

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