Think You Know the Truth about Workers’ Comp Insurance Fraud?
- Dan T. Matrafajlo
- Mon Jul 2016
- Workers Compensation,
Workers’ comp insurance fraud is very real. And, it comes in many varieties. Not just from claimants. Employers are sometimes guilty as well. You may be surprised when we provide you with some details.
As you most likely know, the construction trades don’t always offer steady employment. Gregory Johnston owns Johnston Construction and is a general contractor. He has a full time secretary and a regular foreman. At least five of his laborers work regularly throughout the year. He pays three of them “off the books.”
It seems to work out better that way. The employees earn a higher hourly wage. Johnston Construction doesn’t take as hard a hit for workers’ compensation coverage. After all, the insurance payments are outlandish. Gregory justifies his actions by saying that he is helping his employees out by paying them more money.
And, then there is the day that one of the employees falls. The employee is covered. But, Gregory gets in trouble. For insurance fraud.
We suppose it could have been worse. Gregory’s company had some workers’ compensation insurance. He just wasn’t paying the correct premium. Some employers try to get away without paying comp insurance at all. They are in even bigger trouble.
Workers’ Compensation Fraud Can Get You in Trouble
Of course, workers can also attempt to commit insurance fraud. As attorneys who represent those who have been hurt on the job, it concerns us when these types of allegations are made. Of course, we also realize that many claims made against employees are also erroneous. Some employers are in denial when it comes to admitting the worker was hurt in the course of their employment.
The Workers’ Compensation laws provide guidelines concerning findings of fraud. It is up to the workers’ comp judge to make the determination. It is not a matter that is taken lightly. In fact, there are both civil and criminal charges associated with fraud.
Although the word fraud seems to speak for itself, let’s be clear. Here’s some examples of what could constitute problems:
- Making believe you had an accident at work when you had one at home
- Inventing a non-existent work incident at all
- Fabricating a work-related injury
- Misrepresenting a job status
- Making false claims about prior trauma
Penalties for Insurance Fraud
Wondering about the penalties for insurance fraud? In New Jersey, they are broken down by employers and employees. The New Jersey Department of Labor and Workplace Development lists them as follows:
For Employers: If they have made false or misleading statement to obtain compensation insurance, they may be charged with a crime of the fourth degree. The employer will be also be required to pay what would have been the correct premium. It doesn’t stop there. The court will expect that interest is paid to the insurance company. In addition, the employer will need to take care of the injured party’s bills, including attorney’s fees.
The Failure to Purchase Required Workers Compensation Insurance Coverage is also a crime. It can also include jail time. Civil penalties may result in extensive fines.
For Employees: Workers who are found guilty of fraud can be charged with a crime of the fourth degree. They will also be required to repay benefits.
The Law Offices of Beninato & Matrafaljo has extensive experience dealing with workers’ compensation claims and those charged with insurance fraud. If either of these situations applies to you, please contact us. We would like to assist you.