Red Flags in Workers’ Compensation Claims

Although the majority of workers’ compensation claims are legitimate, there is a regrettable portion that is fraudulent. The types of fraud in workers’ compensation cases can vary widely. An employee may fraudulently extend a lost-time claim by continuing to claim that he or she is unable to return to work despite the fact the injury is healed. Alternatively, an employee may fraudulently claim that an injury was sustained at work, when the injury actually happened off the clock or before the employee was even working for the employer. An employee could also exaggerate or fake an injury, or claim the injury is more serious than it actually is. To help your business avoid fraudulent claims, it is important to recognize the red flags for fraud.

First, examine who witnessed the injury. If an injury had no witnesses or conveniently occurred in the only place on the property without security cameras, this could indicate that the injury is faked. Similarly, if the accident was only witnessed by close friends or even family members of the injured employee, this could be a warning sign.

Next, was the accident report filed on time?  Legitimate injuries are typically reported on time, so an unreasonable delay could demonstrate fraud. Moreover, take notice of whether the accident report conflicts in details with any witness statements, as that could likewise be a red flag.

Third, the employee’s relationship with other workers and the management could be relevant. If the employee is disgruntled due to not receiving a promotion or recently receiving disciplinary action, it may warrant a closer look. This area must be approached carefully, however, as retaliation for filing a workers’ compensation claim is strictly regulated.

Finally, the employee’s history may be relevant. Determine whether the employee has a history of filing multiple claims at once, or even several prior claims. If your company performs background checks before hiring an employee, it may be worth delving into whether the employee has a history of filing claims against a previous employer.  Again, be careful not to use prior claims to discriminate against a potential employee.

It is important to realize that any one of these factors is not a dispositive marker of fraud. For example, just because an employee was injured while no one else around does not automatically mean the employee is making a fraudulent claim.

If you are concerned about an employee’s claim and whether it may be fraudulent, contact us today at 714-516-8188. We look forward to the chance to review your case with you and discuss your facts.

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