The Texas Department of Insurance reports that 13,513 incidents of workers’ compensation fraud were filed in 2015. Those cases referred for prosecution represented a cost of $8.56 million. As an employer, you can reduce your risk of fraudulent workers’ comp claims with a few proactive measures.
Watch for Warning Signs
One method is to look for red flags, warning signs that may indicate a claim is fraudulent. Watch for any of these circumstances that often signal fraudulent claims.
- Timing of the claim – for example, an employee reports a workplace injury prior to an impending layoff or termination; or following a weekend, vacation, etc.
- History of filing claims – has reported numerous other injuries on the job in the past.
- Lack of witnesses – the employee’s explanation of the injury cannot be corroborated by co-workers when it occurred in the workplace.
- Conflicting Reports – Witnesses describe incident in contrast with claimant’s description.
- Delay in reporting incident – Employees should be encouraged to report injuries to supervisors immediately.
- Injury is inconsistent with the type of work involved – if the injury is not something that can reasonably be expected to occur given the job description, such as a back injury when the employee’s work involves no heavy lifting.
- Excessive recovery time – the employee takes more time off than the reported injury should require.
Employee Screening and a Focus on Workplace Safety
The best means of reducing workers’ comp fraud is to create a work environment that promotes safety and discourages fraud. A pre-employment background check will include an employment history and criminal records. Past convictions of fraud, or a history of job-hopping can help identify potential trouble.
Initiate a robust safety program with ongoing training and scheduled meetings to promote safe work practices. Reward workers for achieving safety milestones. It is more difficult to file a fraudulent injury report in a workplace environment where there is an emphasis on safety.
If you are concerned that an injured employee might have filed a fraudulent workers’ compensation claim, consider getting an activity check by a reputable investigative service. An activity check can verify the subject’s recreational and social activities, and may include surveillance if necessary, to determine if a claim is fraudulent.