In our last blog, we discussed the tricky ways employers use to commit workers’ compensation fraud. Today, we will look at why employee fraud occurs less than one percent of time and is not a significant problem, despite the rumor mill that circulates saying otherwise.

The National Insurance Crime Bureau (NICB)reports that workers’ compensation fraud is a $30 billion-dollar problem annually in the United States. And many people assume that the cost comes from employee fraud—but that isn’t the case. The main perpetrators are employers and health care providers. The situation is unfortunate for a significant number of injured workers in America, who due to factors including a lack of awareness, fear of employer retaliation, and anxiety about the negative stereotype, often do not even file for workers’ comp benefits. Many workers report being unfairly judged and presumed of poor character, with hostile attitudes surrounding them.

The Myth that Stigmatizes Workers

Workers often feel stigmatized by the public’s unfair assumption there is an epidemic of employee fraud in workers’ comp cases. Many believe that employees intentionally stay out of work because they are lazy or don’t want to work. That is simply not true. Most injured workers are motivated and ready to work when they are given the okay.But this stigma contributes to the underreporting problem and makes it difficult to affect any change to improve policy. Injured workers report being treated differently and made to feel ashamed about their physical limitations. This sense of shame can lead to the worker becoming depressed and anxious and negatively affect their personal life.  

A Broken System

Since the early 1990’s media and television outlets continually represent a negative public perception of workers’ comp claim. Workers’ compensation started as a fair program—but sadly has turned into a political nightmare, with lower benefits and heavy restrictions. The 98-99% of honest workers suffering workplace injuries must deal with criticism and discrimination to obtain the insurance benefits for which they are entitled.        

Actual Employee Fraud

While workers’ comp fraud rarely happens, it happens occasionally. Workers’ comp fraud occurs when an individual falsely depicts a fact to obtain benefits provided by workers’ compensation. Types of workers’ comp fraud include:

•     Exaggerated injury. Example—an employee may have a sore wrist, but it still functions okay. They amplify their injury and pretend their wrist is unusable to they can collect benefits. This happens occasionally but again, rarely because it’s not worth all the hassle for the small weekly money the employee will receive.
•     Fake injury. Example—a worker is off work for the third week in a row due to a fall at work where he injured his back. There were no witnesses and the worker filed the day after the accident. He has been receiving temporary total disability until one day, a workers’ comp adjuster witnessed the worker operating heavy machinery at a local construction site. The worker is convicted of fraud for faking an injury and receiving money.
•     Malingering. Example—A worker injures his leg at work and it is witnessed by multiple people as a minor accident. The worker continues to report severe pain and refuses to come back to work due to this injury. So, his injury started out as legitimate but quickly turned into someone faking their condition to escape work.

Some red flags of employee workers’ compensation fraud might include:

•     The employee reported the injury late.
•     A Friday night or Monday morning accident.
•     The employee cannot explain the injury and has difficulty recalling what happened.
•     The employee changes his or her version of the accident multiple times and to multiple people.
•     The employee can produce no witnesses.
•     The employee is generally disgruntled or unhappy.
•     The employee is not at home during the workday and seems to avoid contact.
•     The employee has only subjective injuries.
•     The employee seems to doctor shop frequently.
•     The employee demonstrates inconsistent physical ability.

It is uncommon for employees to commit workers compensation fraud, bottom line. The benefit does not outweigh the risk and there is little advantage to it. But that doesn’t stop the stereotyping that makes employees feel they have to prove their injury is legitimate. Rather, employers need to find ways to reduce stigma by increasing education and allowing for open discussion with the worker. Nobody should have to experience discrimination and being made to feel they are “playing the system”. This can and will cause psychological and social harm, which in turn will adversely affect his or her path to recovery and overall sense of health and wellbeing. The fact is there is no prevailing malingering amongst employees. It’s time to look at the those who are truly driving cost and harming the nation with their fraud.