Some Common Employer Workers’ Compensation Fraud Schemes

Inevitably, a few workers try to cheat the workers’ compensation system. They may file false claims or exaggerate their injuries. These kinds of cases always make headlines. However, fraudulent employee claims are extremely rare. They may account for one or two percent of all workers’ compensation matters. Employer fraud is much more widespread.

The fraud schemes outlined below – and others like them – drain funds from the workers’ compensation system. Employers who commit fraud lower their insurance payments, so there is less money for injured worker benefits. These benefits usually include money for lost wages and medical bill payments.

Given the frequency of employer fraud, it is important for injured workers to have an aggressive Rockford workers’ compensation attorney. Otherwise, they have almost no hope of obtaining a fair-sized piece of a shrinking financial pie.

Direct Payment Promises

Many times, when workers are hurt, employers promise to pay medical expenses under the table if the victim does not report the claim. They make these promises not to help injured victims, but to protect their own profit margins. Insurance premiums consider risk and a claim causes premiums to increase.

But future injured workers are not the only people who lose, the injured victim loses as well. By the time the employer reneges on the promise to pay, which is almost a certainty, the claims deadline has probably passed. An attorney may be able to revive the claim, but there is a good chance the injured victim’s family will end up holding the financial bag.

Under-Reporting Payroll

Just like the value of a car is a major factor in auto insurance premiums, payroll amount is a big factor in workers’ compensation insurance proceedings. Unscrupulous employers often under-report payroll in several ways.

Some companies blatantly lie. They submit patently false statements regarding payroll size. Many insurance companies do not monitor these issues too closely, mostly because they do not particularly care about injured workers. Other companies give their workers significant non-cash benefits, like company cars, which they do not report as “payroll” expense. Once again, the amount is artificially low.

Regardless of the scheme, the result is the same. There is less money available to give benefits to workers who need and deserve them.

Misclassification

These schemes, which are among the most common employer fraud scams in Illinois, usually come in one of two forms.

Once again, insurance premiums vary based on risk. So, some employers misclassify high-risk workers as low-risk workers. Roofers become office clerks, refinery workers become refinery managers and so on. These positions pay less, meaning injured workers receive less.

In most situations, employers only lay workers’ compensation insurance for employees. Some employers claim their workers are independent contractors. This scheme hurts workers in two ways. There is less money available to pay claims, and these victims must jump through additional hoops to obtain workers’ compensation benefits.

Count on Aggressive Attorneys

Employer fraud is much more common – and much more costly than worker fraud. For a free consultation with an experienced workers’ compensation lawyer in Rockford, contact Fisk & Monteleone, Ltd. We do not charge upfront legal fees in these cases.