10 Ways for Employers to Reduce Workers' Compensation Fraud in the Workplace

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District Attorney's OfficeGary Lieberstein, District Attorney

Gary Lieberstein

10 Ways for Employers to Reduce Workers' Compensation Fraud in the Workplace

1. Show your employees you care about them.

It’s true. Companies that treat workers fairly and with concern have the fewest job injuries and fraudulent claims. Listen to your employees’ concerns and respond to their input.

2. Maintain a safe work environment.

Every employer should have an injury and illness prevention program. By providing ongoing safety-related training, incentives, and meetings, you can help ensure a safe workplace.

3. Educate your employees about workers’ compensation.

The law requires you to inform your employees about their workers’ compensation rights.  They should understand the workers’ benefits for legitimate claims and the penalties for fraudulent ones.  Don’t be afraid that, by receiving too much information, they’ll abuse the system.  Chances are they’ve already been exposed to misleading information, and you can put an end to any misconceptions.

4. Establish procedures for reporting accidents. 

Familiarize employees and supervisors with workers compensation reporting procedures and have appropriate report forms on hand.  Train supervisors to investigate work-related accidents thoroughly.

5. Handle fired workers with care. 

Disgruntled ex-employees are often angry and more likely to file false claims.  They can also be easy prey for unscrupulous professionals. You should document work-related activities of employees who are about to be laid off or fired.  Conduct exit interviews of employees that include questions about the employee’s physical condition and any on-the-job accidents or injuries not yet reported.  The answers to these questions may help refute or deter future false claims.

6. Publicize your tough stance against fraud. 

Inform employees that all suspicious claims will be investigated and all evidence of criminal wrongdoing turned over the DA’s office for prosecution. 

7. Investigate Immediately.

You should investigate all injuries thoroughly.  In addition, while memories are still fresh, talk to each witness separately, and ask each one what he or she knows about the injury.  Following your investigation, discuss your findings with your claims adjuster.  Be sure to relay any suspicions of fraud.

8. Pave the way for a smooth return to work. 

Keep in touch with injured employees and make it clear you’re looking forward to having them back at work as soon as the doctor gives the go-ahead.  Employees who feel valued and needed are far less likely to abuse the system.  If possible, devise a modified work program to speed their return to work.

9. Neither deny nor confirm doubtful claims. 

You may receive phone calls or letters from medical or legal providers asking you to verify injuries you think are suspicious.  You should refer all such questions directly to your insurance carrier without discussion, because anything you say can be used to legitimize unnecessary medical and legal services.

10. Protect yourself by acting responsibly.

Be aware of the red flags of suspicious activity following a work-related injury.