Employer Fraud - A Billion Dollar Problem
A new study by the Fiscal Policy Institute (FPI) illustrates just how costly employer workers’ compensation fraud can be.
In New York state, the cost is a staggering $1 billion every year – the result of companies that either don’t pay their workers compensation insurance premiums or underpay because they lie about the size of their work force. Honest companies end up paying higher premiums as a result, and injured workers are forced to go without the workers' compensation benefits that they are entitled to.
This study further supports my point that workers comp fraud is much more prevalent among employers than among workers, and it is clearly more of a financial drain on the system. The basis of the workers' compensation system is a compromise between employers and employees - employees forgo their traditional tort remedies in order to obtain a swift recovery, and employers are assured capped damages but are liable for work related injuries regardless of negligence. When employers perpetrate fraud on the workers' comp. system, which they do in far greater numbers than employees, the bargain is eroded.
You can read more about the study in the New York Times (registration may be required) and in this press release from The New York State Public Employees Federation, which is urging reform and a crackdown on employer workers’ compensation fraud.
To read the full FPI report, click here
I agree that the media finds it easier to publish stories of individual worker fraud than of organization level fraud. A main reason is organizations have the resources to investigate and point out the few individual employee frauds, but employees do not have the resources to investigate their organizations, setting up an unequal monitoring. Media should balance this by highlighting organization level fraud - looks like the NYTimes did the right thing by publishing this study. Thanks for pointing out "the other side of the story".