Worker's Compensation/Business Law

The story of Jesus Fernandez , 44 , of Spring Hill , is a clear case of workers ' compensation fraud . Workers ' compensation fraud occurs when someone knowingly makes a false representation of a material fact to obtain or to deny workers ' compensation benefits or to avoid responsibility under the law (What is . Fraud occurs either when an employer misrepresents the amount of payroll or classification of its employees or when an employee claims his injury is work-related when it is not , fakes or exaggerates an injury , prolongs the period when he or she is getting

compensation without rightful reasons or continues working while collecting benefits

Legislators try to combat these practices . New anti-fraud legislation took effect on June 10 , giving the Department of Labor and Industries (L I ) broad new authority to combat fraud and abuse of the workers compensation insurance system . The legislators argue that invalid injury claims , and employers who don 't pay the premiums , put an unfair financial burden on companies that support the insurance system

Rising costs and a broken system result in disappointment about the workers ' compensation system as a whole and give employers reasons to assert that another hike of compensation benefits is unwelcome as long as the system of fighting fraud is not prefect . Unfortunately , it is hard to prove fraud . But if its existence hampers the development of the injury compensation system , the losers will be all employees working in industries with a high degree of injury risk

Fraudulent claims affect small business most severely . A small company may be forced into a tight corner by just a few false injury claims Eventually , the entrepreneur may have to decrease benefits , lay off employees , or go out of business . This is a grave danger for small business-owners and sometimes even reduces them to spying on their employees outside of a physician 's office to see if they are really as sick as they claim to be

Financially , all of us have to pay for someone 's fraud since loss of profit for the company is reflected on all the employees and economy alike . It is detrimental to new job creation , trickles down to the staff in the form of lower wages and benefits , to customers in the rise of service fees and product prices , and to investors in the forfeited dividends . Higher insurance premiums paid by employers affect everybody in the long run costs the system millions of dollars

Since there is a limit to how much a company can allocate to workers remuneration , if it has to raise the amount of benefits set aside for injury compensation , it will inevitably lower the regular wage rates leaving the shows that in fact the wages tend to go down in higher proportion greater in high-risk industries than in low-risk ones in manifestation of cross-subsidizing effect . In case of fraudulent schemes , compensation is redistributed towards rogues who artificially prolong the period of compensation . If these facts become known to other employees , this can negatively affect their morale

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