We have all seen these types of stories in Wisconsin. They often involve video of workers who have falsely claimed some type of injury or disability and are receiving workers’ compensation benefits. A news program may record video of them hunting, fishing, waterskiing or engaging in some other physical activity. They will detail the potential for prosecution for the fraud.
The tone of these reports sometimes seems to suggest that it is only workers commit this type of fraud. However, more severe and typically far less dramatic is when an employer commits fraud in manipulating their companies’ finances or employees to lower the cost of their insurance costs.
Such a case comes from Florida, but these types of cases can happen anywhere. The company was found to have fraudulently understated the amount of its payroll, the number of employees and the activities of the company.
The business was a construction contractor, and by claiming only $76,000 in payroll, it is likely they paid a workers’ compensation insurance premium that was $1.8 million lower than if they had honestly reported their true payroll of $11,000,000.
The owner is facing two felony charges for this fraud and could be sentenced to up to 20 years in prison.
Another way businesses escape paying the proper workers’ compensation premiums is when they misclassify workers as “independent contractors.” If you work on a job site where it appears an employer is engaging in this behavior, you can report them to the Wisconsin Department of Workforce Development.
This conduct can result in civil penalties and needs to be reported, as it hurts all Wisconsin workers and legitimate employers.
Source: insurancejournal.com, “Florida Business Owner Arrested for $1.8M Workers’ Comp Fraud Scheme,” April 7, 2016