How to Combat Workers Compensation Fraud?

Posted by Florida Resource Management on July 17, 2023

Have you experienced workers’ compensation fraud while running your business?

Any kind of workplace fraud represents a certain form of betrayal, and may lead you to question the value of hiring employees in the first place. However, like other aspects of personnel management, you can avoid this incredible frustration if you have the right procedures and optimize your employee selection efforts.

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Florida Resource Management offers many dependable strategies for combating workers’ compensation fraud, but let’s check out some ways to minimize this problem for your company.

Workers Compensation Fraud

  1. Claim Fraud - Sometimes, the employee’s claim itself may be fraudulent. This involves the cases where someone claims an injury happened at work (when it didn’t), exaggerates injuries, or blames a pre-existing illness on the work environment. The culprits would either be the employees themselves, physicians, lawyers, or other policyholders.
  2. Policy Fraud - On the other side of things, it’s also possible for some employers or insurance companies to engage in fraud by under-reporting business payroll. This is done with the aim of obtaining insurance policies at lower rates.

Best Ways to Combat Workers Compensation Fraud

  • Maintain Stellar Business Records - Documentation is a business owner’s best friend for a variety of reasons. It’s possible for employers to mis-classify their employees (unintentionally) as contract workers, which opens a lot of avenues for trouble. However, by keeping better business records and classifying employees accurately, you can avoid the potential for accusations of fraud against you.
  • Create & Enforce Zero-Tolerance Policies - This should include coherent anti-fraud policies, which you would disseminate with employees and review it through training seminars. Make sure your policies are clear and convey your company’s expectations (and consequences for violations).
  • Focus on Selecting The Most Reputable Employees - Once again, background checks and scrutinizing job applicants is so essential. While the ultimate objective would be to hire the best worker, a secondary concern is to make sure you don’t invite anyone with a dubious record to work for you.
  • Offer & Encourage Ways for Other Employees to Report Fraud - Honest, hard-working employees don’t like to work with unscrupulous workers who try to game the system and ruin it for everyone. You can leverage this by encouraging employees to report any suspicious claims they encounter. Ideally, you would devise a means for doing this anonymously without fear of retribution.

Would you like to learn more about this topic and develop ways to counter expensive fraud cases?

Then consider the professional service from Florida Resource Management, where we help you master every facet of managing and motivating employees in the modern workplace. Our Professional Employer Organization (PEO) service not only helps you get a grip on workers compensations fraud but also allows you to better manage payroll, safety, and everything else. Contact us anytime to learn more about what we do by calling 941-343-6160.


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