Ways to Prevent Workers Comp Fraud in Your Business

July 15th, 2013

Ways to Prevent Workers Comp Fraud in Your Business



Workers compensation fraud is a large crime in America that hurts everyone. According to the Coalition Against Insurance Fraud, tens of billions of dollars in false claims and unpaid premiums are stolen every year. In fact, one out of every four insurance fraud claims in the United States is related to workers compensation.1 Scams drive up premium costs, which as a result, drain business profits. Scams cost honest workers their pay and jobs.2  The motive? Free money is the biggest according to the Coalition. As a business owner, fight back against workers comp fraud to well, stay in business. Here are some ways to keep your company in check and prevent workers company fraud.

1. Use sound hiring practices. Fighting workers comp fraud begins as early as the first interview with a candidate for hire. Before hiring any new employees, run background checks on them to see if they have any connection to committing fraud in the past. Closely and carefully verify references and background information.3

2. Educate your employees on the dangers of committing workers compensation fraud. As part employee training, educate employees on what it is, how it can hurt the company, and how it can hurt them. Keep the information fresh in their minds by holding a mandatory training once a year. Between trainings, keep educational posters around the office. You could even include information on the company Intranet or in internal newsletters.3 

3. Implement a safety management program.3 While some accidents in the workplace simply cannot be avoided, as an employer, it’s your responsibility to provide your workers with a safe environment. Contact your insurer about setting up a safety management program. Two ways to keep your employees safe at work are to provide them with ergonomic office furniture (to avoid body pain) and to assure walkways are free of debris to avoid tripping. What are some others you can think of? Leave a comment on our Facebook page.

4. Protect your company with exit interviews. When an employee resigns, give them an exit interview. Ask them about any on-the-job injuries and document everything. Have them sign a form that states whether or not they had an injury on-the-job.Make the statement as detailed as possible. This will minimize problems in the event they file a workers compensation claim after they leave your company.

5. Keep a look out for red flags. If an employee has more or one of the following, you should be skeptical:

  • A questionable work history.
  • Child support lien.
  • An extensive criminal record.
  • Exaggerated details about an incident and/or his or her symptoms.
  • Co-worker skepticism.

If you suspect workers comp fraud, report it right away. Each state has it’s own phone number and location you can report it to. Here are several:

Missouri – Department of Labor and Industrial Relations

New Jersey – Department of Labor and Workforce Development

New York – Office of Workers Comp Fraud

Pennsylvania – Department of Labor & Industry

Wisconsin – Department of Workforce Development


At Bear Staffing, we scan all potential hires before referring them for an interview. Contact us for your staffing needs.


1Intuit 2Coalition Against Insurance Fraud 3MEMIC 4American Family Insurance