California Workers Compensation Fraud - Janitorial Service

Wow! Workers Comp fraud must be the hot thing in the news this week! Check out this page for California Workers Compensation Rules and Laws.

So here's another story about fraud in the workers compensation system. This time it happens to be based in California.

Two executives with a California janitorial service were arrested and charged with fraudulent misrepresentation in reporting the number of employees working in their business. They showed only a husband and wife with no employees. A state investigation found they actually had hundreds of janitors employed. The state indicates this company did not pay $4.4 million in workers compensation premium and another $1.9 million in unemployment and state disability taxes.

So, here's a question....did the owners of this company really think all those performing work for them were independent subcontractors? Is this a mistake they made or was it organized fraud? Well the jury is still out on this one. We'll just have to keep watching and see how this turns out.