[{"@context":"https:\/\/schema.org\/","@type":"BlogPosting","@id":"https:\/\/www.attorneync.com\/blog\/workers-compensation-fraud-cases-causes\/#BlogPosting","mainEntityOfPage":"https:\/\/www.attorneync.com\/blog\/workers-compensation-fraud-cases-causes\/","headline":"Workers\u2019 Compensation Fraud Cases and Causes","name":"Workers\u2019 Compensation Fraud Cases and Causes","description":"If someone were to mention workers\u2019 compensation fraud to you, what would be your first guess at who is generally responsible? Is it employees? That\u2019s what a lot of people wrongly think. According to a poll conducted on Claims Journal\u2019s website, employee fraud was cited as the number one kind...","datePublished":"2017-02-16","dateModified":"2024-11-06","author":{"@type":"Person","@id":"https:\/\/www.attorneync.com\/blog\/author\/robert-c-younce\/#Person","name":"Robert C. Younce, JR","url":"https:\/\/www.attorneync.com\/blog\/author\/robert-c-younce\/","identifier":42,"image":{"@type":"ImageObject","@id":"https:\/\/secure.gravatar.com\/avatar\/d6647152964850e1d70dfca41b41571c73be8e36d0c6971401b8744fe1d25f8c?s=96&d=mm&r=g","url":"https:\/\/secure.gravatar.com\/avatar\/d6647152964850e1d70dfca41b41571c73be8e36d0c6971401b8744fe1d25f8c?s=96&d=mm&r=g","height":96,"width":96}},"publisher":{"@type":"Organization","name":"Younce, Vtipil, Baznik & Banks P.A.","logo":{"@type":"ImageObject","@id":"https:\/\/www.attorneync.com\/wp-content\/uploads\/2020\/03\/logo2020b.png","url":"https:\/\/www.attorneync.com\/wp-content\/uploads\/2020\/03\/logo2020b.png","width":390,"height":107}},"image":{"@type":"ImageObject","@id":"https:\/\/www.attorneync.com\/wp-content\/uploads\/2019\/03\/workers-compensation-fraud.jpg","url":"https:\/\/www.attorneync.com\/wp-content\/uploads\/2019\/03\/workers-compensation-fraud.jpg","height":206,"width":400},"url":"https:\/\/www.attorneync.com\/blog\/workers-compensation-fraud-cases-causes\/","about":["Workplace Injury"],"wordCount":979,"articleBody":"If someone were to mention workers\u2019 compensation fraud to you, what would be your first guess at who is generally responsible? Is it employees? That\u2019s what a lot of people wrongly think.According to a poll conducted on Claims Journal\u2019s website, employee fraud was cited as the number one kind of workers\u2019 compensation fraud. But the poll\u2019s results actually reflect a major misperception.According to Claims Journal, employer and healthcare workers\u2019 compensation fraud are more common and cost the system much more. They are just less publicized by state insurance departments.The North Carolina Workers\u2019 Compensation Journal recently summarized the top 10 workers\u2019 compensation cases for 2016 \u2013 and none of them involved fraud committed by employees.What Is Workers\u2019 Compensation?Workers\u2019 compensation is insurance designed to compensate employees who are hurt on the job. It pays for medical bills, therapy, rehabilitation, and some amount of time off work in some situations.Some states require all employers to carry workers\u2019 comp insurance, some require it based on the number of employees and the industry, and some do not require it at all. In exchange for receiving workers\u2019 compensation benefits, employees are barred from suing their employer over the accident.Carrying workers\u2019 compensation insurance is not cheap for companies, and perhaps they have concerns about fraud, but carrying the insurance is a great way to manage their risk and avoid larger payouts. Find out if your North Carolina Employer is covered here.Top 10 Workers\u2019 Compensation Fraud CasesAccording to the North Carolina Workers\u2019 Compensation Journal, the top 10 cases of workers\u2019 compensation fraud from 2016 resulted in a loss of $412 million. Nine out of the 10 cases were from 4 different states. One case involved 20 different states.Many of these cases result from companies misclassifying employees as independent contractors. Fortunately for the employees, the courts often do not agree with the classifications. Another sizeable chunk of the top cases involve companies that overstate and overbill their employees\u2019 or clients\u2019 injuries, and from companies that evade payroll tax or misrepresent the number of people working for them.Here are the top 10 workers\u2019 compensation fraud cases from 2016, as highlighted by the North Carolina Workers\u2019 Compensation Journal:FedEx Driver Lawsuits in 20 states.These cases came about because of FedEx classifying and treating their drivers as independent contractors. Because they were paid as contractors, FedEx was able to avoid paying a full array of benefits for their drivers. But a court determined that FedEx has to pay out $240 million to 12,000 drivers in 20 states.Healthcare Fraud\u00a0A business scheme for committing workers\u2019 compensation fraud ended with seven people being charged with 107 felonies. The leader of the group owned a number of different businesses that committed fraud by exaggerating patient injuries and treatments and inflating billing to insurance companies. The businesses overbilled by around $12.4 million.Labor Department Inside JobA group of people created several businesses that fraudulently billed the federal workers\u2019 compensation program $30 million. The ringleader\u2019s niece worked for the Department of Labor in Dallas and tipped her family off when the billing came to the Department\u2019s attention.Construction Company Fraudulent Payroll\u00a0A business owner used her construction LLC to process payroll for subcontractors, charging 5% for her services. Because of the way it was set up, the subcontractors were able to avoid paying payroll taxes and workers\u2019 compensation for hundreds of employees.Construction Company Fraudulent Undocumented Workers PayrollA company set up by two men processed payments and checks for other companies, so the companies could pay their undocumented workers and avoid workers\u2019 comp and payroll taxes.Insurance Company Agent Fraud\u00a0A business operator in California took $7.3 million from the company\u2019s reserve accounts to use for personal investments. The company managed another company that sold workers\u2019 comp insurance. Because of the theft, the company was unable to pay for 117 workers\u2019 compensation claims.Contractor FraudThe owner of a contracting company underreported his payroll and committed insurance fraud. He was ordered to pay more than $5.4 million in restitution.MisclassificationConstruction companies misclassified most of their employees as independent contractors so they could avoid paying benefits like overtime, workers\u2019 comp, payroll taxes, etc. The companies were ordered to pay more than $2.6 million in damages and penalties.Payroll FraudTrucking company co-owners paid their drivers in cash to avoid reporting employees to their insurer and to avoid payroll taxes. They underreported their payroll by $4.7 million.Payroll FraudA construction company owner misrepresented details about her company\u2019s operations, number of employees and payroll when she applied for the workers\u2019 compensation policy. This allowed her to avoid paying at least $1.8 million in workers\u2019 compensation premiums.None of these 10 cases involve employee fraud.How Our Raleigh Law Firm Can HelpIf you have been injured at work and you have been misclassified as an independent contractor, don\u2019t give up just yet. You may have options for getting compensation for your injuries.Many who work at a job where on-the-job injuries are common are incorrectly classified as independent contractors, when they are actually regular employees. If that is the case for you, you may be eligible for workers\u2019 compensation.You may also have other recourses for receiving compensation for your injuries, even if a court or insurance board does not consider you to be misclassified, so it is worth your peace of mind to talk to us today. We will walk you through your options and fight for you every step of the way to seek the compensation that you deserve.About the AuthorRobert C. Younce, JRRobert C. Younce is an attorney at Younce, Vtipil, Baznik & Banks, P.A. and concentrates his law practice on personal injury and workers\u2019 compensation law. He has tried over 100 workers\u2019 comp cases to Opinion and Award and about a dozen personal injury jury trials to verdict. He has been board-certified by the North Carolina State Bar as a specialist in workers\u2019 compensation law since 2001."},{"@context":"https:\/\/schema.org\/","@type":"BreadcrumbList","itemListElement":[{"@type":"ListItem","position":1,"name":"Blog","item":"https:\/\/www.attorneync.com\/blog\/#breadcrumbitem"},{"@type":"ListItem","position":2,"name":"Workers\u2019 Compensation Fraud Cases and Causes","item":"https:\/\/www.attorneync.com\/blog\/workers-compensation-fraud-cases-causes\/#breadcrumbitem"}]}]