Workers' Compensation Fraud Lands Employers in Hot Water
Workers' Compensation is a compromise between employers and employees. Employers cover injured employees' medical costs and lost wages. They do this even if they were not at fault. Employees lose the right to sue their employers over injuries.
State laws require most employers to buy Workers' Compensation insurance. Employers may see this as money unnecessarily spent. They must pay it even if no injuries occur in their workplaces. Consequently, a minority of them try to cheat the system. Things do not end well for these employers.
Some try to get away with not buying insurance.
More commonly, employers buy insurance but give their insurers false information.
The owner pled guilty to multiple felony counts, received a 16-month jail sentence and was ordered to pay $2.385 million in restitution. His wife also pled guilty, received three years' probation and had to pay a fine plus $470,000 in restitution.
A common tactic is to misclassify employees.
Some employers also try to pass off false evidence of coverage. The owner of an Ohio excavating contractor created false certificates of insurance and submitted them with bids to help him get jobs. In addition, he misclassified employees as independent contractors. He got six months in prison, three years of monitoring, and had to pay restitution.
Employers who try to cheat the Workers' Compensation system rob their employees of the benefits to which they are entitled. They also gain an unfair advantage over their law-abiding competitors. Employers who decide to play this game should understand that they will eventually lose.
March 21, 2017
by John Connor