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Human Resources Tip: How To Handle Suspected Workers Comp Fraud

By January 26, 2013February 19th, 2015No Comments

iStock_000014996052XSmallQuestion: Human resources must carefully evaluate when workers are injured or cannot work.  How do you handle a situation where you suspect a fraudulent workers comp claim? Can you, as the employer, terminate the employee if you strongly suspect a fraudulent claim for workers comp has been submitted?  Is there a best practices procedure that an employer must follow to terminate the employee?

Response: A fraudulent workers comp claim must be proven, not just suspected.  As the employer, you can advise the workers comp carrier of your suspicion.  The workers comp carrier will investigate.  If they determine that it was in fact a fraudulent workers comp claim, then it would be up to you, as the employer whether or not you wish to terminate the employee.  Fraud on any level is a valid reason to terminate.  Of course, it is much clearer if your organization has a policy manual with a policy that clearly addresses fraud, honesty, appropriate reporting and matters related to when workers comp may be appropriate.

If the fraudulent activity is not confirmed, then the empoyer should be careful to avoid the impression that the organization is acting in retaliation to the workers comp claim.  Certainly the employer should not interfere with the empoyees workers comp claim if it is a legitimate situation.

Once the employee is out on workers comp, an employer must be aware that termination may violate the American Disabilities Act (ADA).  Evaluate the entire situation, including work history and the existing situation prior to making the decision to terminate.

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