Fraud Prevention For Workers Compensation: How To Protect Your Policy And Your People
For many businesses, it is essential to have workers' compensation coverage. It protects both employees and employers if an injury occurs on the job. Workers' compensation covers many important expenses such as lost wages, rehab services, and medical costs. However, fraud is always possible whenever there are benefits.
Common forms of workers compensation fraud
There are many different levels of work comp fraud that can occur. Employers may make false claims, as well as employers. Here are some of the more common kinds of fraud:
Employee claim
This occurs whenever a claim for benefits is filed by an employee when they are not entitled to it. For example, their injury might have occurred somewhere other than work.
Employer fraud
This occurs when a claim is not filed by an employer. they might try to deal with the incident on their own. For example, they might pay for medical expenses to try to avoid having to report an injury.
Premium fraud
This occurs whenever wrong information is provided by an employer about their workforce. That includes high-risk workers being classified as lower-risk and reporting an incorrect payroll.
Why is fraud committed by employees?
There are various reasons why employees commit fraud. Some people have a criminal history in their past. Others are struggling with a bad life or work situation. They view work comp benefits as being a better option for them. In certain desperate situations, investigators have encountered self-injury. Sometimes purposeful injuries are the most serious.
Why is fraud committed by employers?
A business owner might commit fraud in order to keep or get lower premium rates. Ashley Boxhall from Melbourne Roofing company AMB Roofing explains the problems in the industry, “A roofer, for example, might be classified on payroll documents as a secretary. A roofer is a higher-risk job than a secretary.” Therefore, lower premiums are paid for secretaries. In those cases, an injured employee will still be completely covered. However, there will be some serious questions that need to be answered by the employer.
Institute a reporting policy
The key to keeping your employees safe is to have safety policies in place. Any incident that occurs in the workplace should be immediately reported. The more time that goes by between when the incident occurs and when it is reported, the more time someone will have to make a story up. It can also be very easy to forget some of the details of an incident even after a couple of hours. Quick reporting reduces the risk that an injury will become worse. Institute a reporting policy for incidents. Make sure your employees understand and sign the policy.
Sydney Business Mentor Muzi Dan explains, “If employees understand that any incidents will be followed up on by their employer, they might not be so inclined to commit fraud.”
Get to know your employees
Sydney Leadership coach Jeanine Sciacca emphasises, “It is more likely that employees will file a false claim if they think they are being treated unfairly. Get to know your employees. Talk to them. Hold safety meetings on a regular basis. Review safety rules together. Listen to concerns that your employees have.” We recommend that you create a positive environment for your employees so they feel needed and wanted.
Investigate the claim
After an incident occurs, an investigation should be conducted by the employer. Collect statements from any witnesses. Use a smartphone or camera to photograph the scene. If possible, get a written statement from the employee. How did they become injured? Given the cause, does the injury make sense? Make a note of any strange details and tell your adjuster about them.
Why is fraud something businesses should care about?
Financially speaking, fraud can be expensive. It causes premium rates to go up. The rates eventually go up for all employers. It affects everyone and it is not cheap.
How a suspected fraud case should be handled
An employer might suspect fraud when a workplace incident is being investigated. Focus only on the facts. Do not accuse an employee of fraud, especially when you do not have any proof. Conduct your investigation first.
Don't fire an employee. That could violate an employee's rights or state laws. If you want to take some type of action, first contact an attorney for legal assistance.
Workplace injuries should always be reported
Work comp fraud is not just committed by employees. Some employers might try to avoid reporting a claim. They might try to deal with the claim internally. That is illegal. All injuries that occur on the job are required to be reported.
Be prepared for fraud cases in the future
The longer that an employer stays in business, the higher the chance is that they might be faced with a fraud case at some point. All businesses should prepare for possible fraud cases. In addition to getting to know your employees, conduct careful checks before a new hire is bought on board. A majority of career criminals will talk. They might brag about past injuries or benefits that they are planning on receiving.
Be sure to get an incident reporting policy put into place. Have all of your employees read the policy and sign it. If or when an incident does occur, an investigation should be conducted. What happened? Who was involved? When and how did it happen? Was there anything unusual? Make notes on all of this and report everything to your adjuster.
There is a common myth that workers' comp fraud does not cost anyone anything. However, work comp fraud actually has a very high cost- for everyone who is involved.
Qld Covert Investigations' team of Private Investigators have the skills and knowledge to uncover any fraudulent claims. If you are suspicious of fraudulent workcover claims in your business, call 1300 553 788 to arrange a free consultation with one of our professional, licensed Investigators today.
