Though stories abound about employees who have allegedly committed workers’ compensation fraud, seeking and obtaining benefits for injuries they have not sustained, or that were incurred outside of work, little gets reported about workers’ compensation fraud perpetrated by employers, but it does happen. Here are the two most common instances:
The Employer Fails to Obtain Workers’ Compensation Insurance
Under New Jersey law, if an employer is not covered by a federal program, and has not been approved to be self-insured, the employer must purchase a valid policy of insurance to cover any benefits that must be paid to an injured worker. The failure to do so is, at a minimum, considered a disorderly persons offense, with a potential penalty of up to 18 months in jail and a possible fine of up to $10,000. If the violation is “knowing,” the offense is deemed to be a crime of the fourth degree and the employer may be subject to a stop work order, prohibiting the employer from conducting business for a specified period of time.
An Employer Misrepresents Information to the Workers’ Compensation Insurance Company
Workers’ compensation premiums are based on two factors—the amount of an employer’s payroll and the specific occupations the employer is insuring. Employers pay higher premiums for employers in jobs with greater likelihood of injury. Accordingly, it is fraud to either misclassify workers, indicating that they are working exclusively or primarily in a less-risky position, or to misrepresent the amount of wages paid to employees. It is also fraud for an employer to wrongfully and knowingly claim that employees are independent contractors and not subject to workers’ compensation coverage.
Contact Our Office
For a free initial consultation, contact our office online or call us at 973-993-8787. We have office locations in Morristown and Newton, but will visit you in your home or the hospital, if necessary.