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Los Angeles Employer Workers' Compensation Law Blog

How much can I be fined for not having workers' comp insurance?

As an employer, you may have a number of obligations related to your business. For example, you may need to hire staff for an upcoming season or you could be dealing with an employee's lawsuit. However, you could find yourself in a particularly difficult situation if you are uninsured. In Los Angeles, and across the entire state of California, employers are required to provide workers' compensation coverage, even if they only have one employee. If your business does not have workers' comp, you could face various consequences, including stiff fines.

According to the Department of Industrial Relations, the state of California can fine you as much as $100,000 if you do not have workers' comp insurance. Furthermore, you could be sentenced to one year behind bars and hit with at least $10,000 in fines if you are facing these charges. In addition to costly fines, you could have to cover an employee's medical expenses if they suffer an injury or illness while working and you do not have workers' compensation coverage. Moreover, you may find yourself in the middle of legal action.

Injured workers and Social Security disability

In California, employees are hurt in the workplace on a daily basis. For some injured workers, different challenges may arise. For example, people may struggle with daily tasks because they have an inability to walk or drive. In Los Angeles, and other parts of the state, injured employees may also experience financial hardships due to missing work. However, some people claim they are in this position solely to take advantage of Social Security disability benefits.

When it comes to receiving disability, workers with injuries must meet a number of requirements, according to the Social Security Administration. For example, the person must have an injury which is so serious it leaves them unable to work. Additionally, the employee needs to have been employed in an occupation that is covered for a certain period of time, often at least 10 years. The person's injury must prevent them from working, typically for a year or longer, given his or her academic background, work history and age.

Particularly in California, workers' comp claims are a threat

As the recent election proved and as others have proven in the past, states are entities with minds of their own. So when there is a seemingly national trend, there are still those states that stand out as different and notable in regards to certain matters. California tends to stand out for various reasons. 

In terms of what is relevant to this workers' compensation fraud defense blog, it is noteworthy to point out how California strays from the nation's recent workers' comp trends. Reports show that while there has been a decline in the number of claims filed in the country in recent years, here in California, the reality is different.

Workers' compensation fraud is a cost to society

Today's society provides a sense that business can be the big bad wolf. But that is simply not true. Businesses keep an economy strong. They keep people employed and able to support their families. The strength of corporate America can symbolize an overall strength of the country. 

Therefore we thought it might be valuable to report the cost that fraud can present to the state of California and the whole country. According to the California Department of Insurance, workers' compensation fraud costs the state between $1 million and $3 million a year. The reported cost to the country is more astounding: $30 billion.

Will workers' comp insurers now be expected to cover medi-pot?

Marijuana is still a Schedule I controlled substance under federal law, and the passage of Prop 64 by California voters will not change that. Nevertheless, the legalization of cannabis for recreational purposes is likely to remove some of the stigma around weed in general, which may make doctors more open to its use in conditions that aren't currently on the list.

At some point, marijuana could be routinely prescribed and part of most health insurers' formularies. In the not-too-distant future, marijuana might be a treatment injured workers expect to be covered by workers' comp, according to a recent white paper by the California Workers' Compensation Institute. It hasn't happened yet, but insurance companies need to start thinking ahead.

California officer going to jail for workers' compensation fraud

Employers can not monitor their workers 24 hours a day. Even police officers have time off duty wherein they are free to live their lives as they so choose. What they or other workers are not free to do, however, is claim that they have been injured on the job in order to collect benefits when such details are untrue. Workers' compensation fraud is subject to prosecution in California and all other states. One police officer recently  learned that the hard way.

The officer claimed he injured his back in a traffic collision while on duty. The 28-year-old filed a workers' compensation claim related to the alleged incident in 2014. Afterward, he took periodic leaves of absence which he claimed were related to his case. 

Seeking assistance when an injured worker claim is suspicious

California workplaces are like all others in that, sometimes, mishaps occur on the job. In fact, there are certain industries that seem prone toward workplace accidents, such as construction or farming. Even in the average office space, it is not all that uncommon for an injured worker claim to be filed after an accident has occurred.

Problems may arise, however, if an employer suspects that a worker's claim is fraudulent. This has been known to happen on many occasions, sometimes actually leading to criminal prosecution, conviction and time behind bars for the worker who perpetrated fraud. Employee fraud threatens the bottom line of a business, and many employers worry that they will bear the brunt of it all by being forced to pay increased insurance premiums further down the line.

Workers' compensation fraud can go both ways

In California or any other state, willfully misrepresenting the details of a workplace injury is against the law. Classified as workers' compensation fraud, lying about a work injury is a serious matter that may be prosecuted in criminal court. On the other side of the fraud issue, however, it is also illegal for an employer to enter false data regarding payroll or employee classification.

Employers faced with employee fraud may be subjected to increased insurance premiums. Moreover, monies once available to offer higher wages to workers will be consumed by the process of fighting against the fraud. It is a no-win situation that can take a drastic toll on the bottom line. However, rectifying such situations is often possible. Typically, a first step in doing so often involves contacting a law office.

Man could spend a decade in prison for employee fraud

Many married couples share vehicles, bank accounts, and even income. While such practices may be typical in California and elsewhere, there are certain actions that may be unethical and illegal. For instance, it is never okay to use one's spouse's Social Security Number to collect income; this would be considered employee fraud.

A man in another state may be learning this lesson the hard way. In fact, he now faces up to 10 years behind bars for collecting benefits to which he was not entitled. Authorities say he collected as much as $450K over the course of many years.

Bartender gets probation for workers' compensation fraud

There are most likely many people in California and elsewhere who make their livings tending bar. Hopefully, none of them are doing so while lying to the state about past work injuries and false unemployment. Workers' compensation fraud is illegal; in fact, one man in another state was recently put on probation after being caught in a fraudulent scheme.

The now 57-year-old man initially began collecting benefits after filing a claim in which he stated he had been injured on the job in his work at a grocery store. That incident occurred in 1994; since then, he has repeatedly told the state he remained unemployed, even though that was not true. Since approximately 2013, he has been working as a bartender while continuing to collect benefits.

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