What Is Workers Compensation Fraud?

Workers’ compensation is a core part of labor laws, designed to protect employees who suffer injuries on the job by covering their related medical expenses and providing them with wage replacement during recovery.

However, like any system, workers’ compensation is unfortunately subject to misuse. Understanding workers’ compensation fraud is essential because fraudulent activities undermine trust in the system and can have significant consequences not only for those who commit it but also indirectly affect honest employees filing legitimate claims.

Workers need to recognize that fraud can take various forms and understand what exactly entails fraud to ensure you don’t intentionally fall into this behavior.

Defining Workers’ Compensation Fraud

Workers’ compensation fraud is a deliberate act, entailing making false statements or concealing pertinent information with the intent to receive undeserved benefits, or intentionally denying someone access to entitled workers’ compensation benefits. This means workers’ compensation fraud can happen by multiple parties – claimants, employers, and insurance companies.

Workers’ Compensation Fraud on Behalf of Claimants

Workers’ compensation fraud committed by claimants usually involves individuals filing dishonest claims to gain benefits they are not actually entitled to receive. Common examples include:

Exaggerating symptoms

It is fraudulent for individuals to exaggerate their symptoms beyond what is medically substantiated. This could involve claiming that pain is more severe than it actually is or pretending that mobility or functionality is more limited than it is in reality, all with the aim of obtaining workers’ comp benefits.


This occurs when an employee intentionally prolongs their recovery process by pretending they haven’t yet sufficiently healed in order to avoid returning to work. This allows them to collect workers’ comp benefits for longer than they’re really entitled to.

Old Injury Claims

Some individuals might report a pre-existing injury as new and work-related to access workers’ compensation benefits improperly. By presenting an old injury as having occurred on the job, they gain financial advantages that are not rightfully theirs.

Working while allegedly disabled and not reporting income

It’s fraudulent for claimants to secure workers’ compensation benefits by asserting they are too injured or disabled to work when in fact, they’re actively earning an income from employment elsewhere. By doing this, claimants are effectively double-dipping: receiving wage replacement while still bringing in a paycheck.

Failure to Disclose Previous Injuries

Claimants are legally required to disclose any prior injuries or claims that may be relevant when filing for workers’ comp. Concealing such information could suggest an attempt to attribute ongoing health problems entirely to a recent work-related incident instead of acknowledging pre-existing conditions which could affect both causation and treatment.

Claiming a non-work injury as a work-related injury

Claiming a job-related injury that never occurred or claiming a non-work injury as work-related involves false representation about how the injury was incurred to illicitly gain access to workers’ comp benefits.

Falsifying mileage reports

Falsifying mileage reports involves claimants submitting dishonest travel documentation for treatment or other travel related to an injury. This unjustifiably elevates reimbursement amounts.

Falsifying Medical Records

Altering or inventing medical records is a serious type of fraud. These deceptive practices can involve changing dates, forging doctors’ signatures, inflating the level of injury in medical reports, or creating false documents altogether to create a narrative that supports a fraudulent claim for workers’ compensation benefits.

Understanding and recognizing the various forms of workers’ compensation fraud committed by claimants ensures you don’t make any mistakes or commit fraud unintentionally. Even something as small as exaggerating your symptoms could be considered fraud, which is important to know.

Workers’ Compensation Fraud on Behalf of Employers

While workers’ compensation fraud is often associated with claimants, it’s important to know that employers can also engage in deceitful practices concerning workers’ comp benefits. Here are a few ways employers may engage in this type of fraudulent activity:

Misclassifying Employees

Employers might classify workers incorrectly as independent contractors (who are typically not eligible for workers’ comp benefits) to cut costs associated with having regular employees. By doing this, they avoid paying the premiums for workers’ comp insurance.

False Representation of Safety Program

Some organizations may lie about maintaining a workplace safety program or downplay the severity of occupational hazards met by their workforce. Proper safety practices usually lower insurance premiums, but falsifying this information manipulates rate reductions without just cause.

Failing to Purchase Required Insurance

This involves employers simply not purchasing the workers’ compensation insurance they’re obligated to maintain by their state’s laws. This unethical move leaves employees unprotected in case of work-related injuries, yet some companies risk it as an immoral way of lowering overhead.

What To Do If Your Employer Is Committing Workers' Comp Fraud

What to do if Your Employer is Committing Workers’ Comp Fraud

If you suspect that your employer is engaging in deceitful practices related to workers’ compensation benefits, it’s crucial to know how to protect yourself and take appropriate steps. The following actions can guide you through this process:

Document Everything

It’s crucial to keep record of any pertinent information that could suggest fraudulent behavior by your employer. This might include irregularities like workforce misclassification, altered timesheets, underreported wages, or discouragement – subtle or otherwise – against reporting workplace injuries.

Report Internally

If you think it  is safe and feasible based on your circumstances, take the concerns to a higher authority within your organization, like reporting issues involving workers’ comp fraud to your company’s human resources department or compliance team. Internal resolution can sometimes be faster and ensures the company is aware of what’s happening.

Stay Informed

Ensure you stay updated regarding the progress of any investigation and subsequent legal proceedings that could arise from your report.

Seek Legal Advice

Upon suspecting employment fraud, reach out to an attorney — one who specializes in workers’ compensation or labor law. A seasoned lawyer provides necessary guidance on next steps and ensures you remain safeguarded legally as they have knowledge of all different facets of workers’ rights.

Uncovering employer fraud in workers’ compensation is a serious matter. Support from proper legal representation from a Washington D.C. workers compensation lawyer can ensure your voice is heard and represented fairly, safeguarding both your interests and those of other potential victims impacted by such conduct.