How Far Will They Go To Avoid Paying Workers Comp?

What a question! There seems no end to how far some people will go to avoid paying their fair share of workers compensation premiums. Don't get me wrong, workers comp premiums can be very expensive for a business owner to cough up and during tough economic times some folks turn to fraud as a way to bilk the workers compensation insurance company out of premium dollars they owe!

In the news you'll find a Kentucky coal mine operator recently charged with fraud. They allegedly set up a shell trucking company and showed payroll for some of their underground miners in the trucking company to avoid paying the higher underground mining rates.

You'll find others are not as creative and resort to things like shifting payroll from higher rate workers comp code classes to lower rate classes, this is called misclassification of employees; or not reporting workers as employees but considering them as subcontractors or independent contractors, there are many rules that apply when determining employee status; And on and on...

So, yes workers comp can be expensive and any business who has a workers compensation policy should have that policy reviewed for accuracy by an independent work comp consultant. Honest mistakes are made by insurance companies every day, mistakes that can be found and corrected with the proper help!

Workers Compensation Fraud - California Father and Daughter Charged

California workers compensation laws are there for a reason! I'm starting to sound like a broken record but it seems fraud in the workers compensation system is on the loose!

Here's another short story of fraud recently addressed in the California workers compensation system.

It seems a father and daughter operating a business located in California were recently arrested for workers compensation premium fraud. Charged with a total of 11 felony counts these folks are accused of under reporting their workers comp payroll in an effort to minimize their workers compensation premiums to the tune of over $1,000,000. Wow! This activity occurred between 2003 and 2008, over a five year period. They are accused of misrepresenting the activities and even the existence of staff, superintendents, job foremen, subcontractors and others and failure to report accurate employee payroll information. They evidently were tripped up when various insurance carriers were presented with a total of 4 injured worker claims over the five year period of time while all along the father and daughter team denied they even had employees.

Think about it. That's a MILLION DOLLARS taken out of the workers compensation system. Money that would have gone to statistically help support other employers in the state. When this type of activity occurs it really does effect all others who step up to the plate and shoulder the responsibility of providing workers compensation coverage for their employees.

Thanks!