Can I Delay Benefits If I Suspect My Employee of Workers’ Compensation Fraud

Workers’ compensation fraud costs Californians tens of millions of dollars each year.  The state of California has put into place many programs, laws, and departments to help combat this type of fraud.  The programs put in place help stop fraud before it starts, as well as prosecuting those who have already committed these crimes.  It is admirable for employers to want to help with the efforts to put a stop to fraud.  Some employers may wonder if they can delay workers’ compensation benefits if they suspect their employee is committing fraud.

The short answer to this question is “no.”  There are a lot of potential red flags for workers’ compensation fraud that an employer can be on the lookout for.  These include such issues as a lack of witnesses to an injury, delayed reporting, or the first report of an incident coming straight for an attorney.  When an employer receives a report of an incident with one of these fraud red flags, it may be tempting to refuse to take the written report or even to hold off until the employee can have a medical evaluation.  This is not permitted under California law.  Even if you suspect your employee is faking the injury, you are still required to provide your employee with a workers’ compensation form within one working day after the employee reports the work-related injury or illness.  Once the employee returns the form, the employer will have one working day to forward the claim form to the claims administrator of the workers’ compensation insurance company.  There are no exceptions to this for potential fraud.

Not all suspicions of fraud come at the very beginning of the case.  It is possible that as the case progresses, an employer may see other signs of fraud, such as social media posting showing the employee is active, potential medical fraud, or malingering.  If this occurs, an employer still does not have the right to put a halt to or somehow intercept the payments that are being made to the employee under workers’ compensation.  Instead, the employer should carefully document all concerns and report them to his or her workers’ compensation claims administrator.

We have extensive experience with helping our clients understand the role of their business in fraud prevention.  Call us today to discuss your case and what we can do to help.

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