What is Employee or Workers’ Compensation Fraud?

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What is Employee or Workers’ Compensation Fraud? and Why you should care about Employee Injury Fraud

Employee or workers’ compensation fraud costs the Washington State workers’ compensation system millions of dollars each year. Employers, employees, insurance carriers and Washington consumers pay the cost of fraud in lost jobs and profit, lower wages and benefits, and higher costs for services and premiums.

Report-a-Fraud Hotline


Workers’ compensation fraud can be committed by employees, employers, health care providers, attorneys and others. The amount assessed by the Department of Labor & Industries through administrative fraud orders, settlements, assessments and court orders in fiscal year 2000 was $30.4 million.

What is L&I doing?

L&I is serious about detecting, investigating and deterring fraud. The department’s fraud investigation staff works with state and federal law enforcement, and other regulatory agencies, to detect and prosecute individuals and businesses involved in fraudulent activity related to Industrial Insurance. Investigations often lead to criminal prosecution and recovery of money.

To learn more about what workers’ compensation fraud really is and about what L&I is doing to reduce it, look at the different types of workers’ compensation fraud listed below.

What does the law say about workers’ compensation fraud?

Fraud comes in many forms. It ranges from a business under-reporting worker’s hours to providers billing for services not performed, to an injured worker collecting time-loss compensation benefits while working at another job. All of this costs Washington workers and employers millions of dollars each year. The Washington State Legislature has provided statutory authority to L&I to punish those businesses, health care providers, and workers who commit Workers’ Compensation fraud.

RCW 51.32.240 (5) states in part that ..”Whenever any payment of benefits under this title has been induced by willful misrepresentation the recipient thereof shall repay any such payment together with a penalty of fifty percent of the total of any such payments.”

RCW 51.48.020 provides for felony (class C) charges to be filed against any employer who knowingly misrepresents to the department the amount of payroll or worker hours. The employer shall be liable for up to ten times the difference in premiums due as well as any reasonable expenses of auditing the employer’s books. It further states that ..”any person claiming benefits under this title, who knowingly gives false information required in any claim or application under this title shall be guilty of a felony, or gross misdemeanor in accordance with the theft and anticipatory provisions of Title 9A RCW.” Title 9A is the criminal statute under which a business or individual may be charged for the commission of theft against the department.

If you suspect a business, health care provider or injured worker may be committing fraud, go to the appropriate page below and submit a fraud allegation form.

Workers Compensation Injury Fraud-Washington State Investigators-Seattle Investigations

Injured Worker Fraud

Prevent Fraud in Washington State

* Spotting the red flags
Below are a few of the behaviors that might indicate injured worker fraud. Need help determining? Contact the Fraud Investigations staff at 360-902-4755 or [email protected].
• Claim Fraud: Not injured at work (or not injured at all)
• Unfair Benefits Fraud: Doing activities inappropriate for an injured worker
• Disability Fraud: Working while on disability

Claim Fraud: Not injured at work (or not injured at all)
If you see someone who …
• Appears to have been injured, but no one else witnessed the accident.
• Gives conflicting stories as to how the injury occurred.
• Appears to have let a lot of time elapse between the injury and the date they first got medical treatment.
• Appears to have sustained the injury while off work.
• Appears to have been injured immediately prior to a planned strike or the completion of a job.
• Appears to have been injured immediately prior to or after a disciplinary action against them.
• Appears to have been Injured immediately prior to being terminated from their job.
• Moves out of the state or the country shortly after the alleged injury.
• Appears to have a history of filing multiple claims.

Report Claims Fraud

Call: 1-888-811-5974

Unfair Benefits Fraud: Doing activities inappropriate for an injured worker
If you see someone who appears to …
• Participate in recreational or other activities inconsistent with alleged injury.
• Claim dependents not in his legal/personal custody.
• Claim a spouse when not married.
• Misuse drugs or display drug-seeking behavior (prescription or non-prescription).
• Frequently change doctors (“doctor shopping”).

Report Unfair Benefits Fraud

Call: 1-888-811-5974

Disability Fraud: Working while on disability
If you see someone who appears to …
• Be working while on time-loss.
• Be regularly away from home during normal business hours.
• Be receiving unemployment benefits while on time-loss.
• Be working and being paid “under the table” while receiving time-loss benefits.
• Be doing “volunteer” work while receiving time-loss benefits.
• Be providing care under DSHS’s COPES program while on time-loss.

Report Disability Fraud

Call: 1-888-811-5974

Report Workers’ Comp Discrimination

Do you believe your employer is discriminating against you because you were injured on the job?
If so, you have rights under Washington law:
Your employer may not discriminate or retaliate against you for:
• Filing a claim for a workplace injury.
• Saying that you plan to file a claim.
• Seeking all the workers’ compensation benefits to which you are entitled.

Questions workers have:
• What is considered employer retaliation or discrimination after you have filed a workplace injury claim?
o Firing you or laying you off.
o Demoting you or assigning you to an undesirable shift.
o Refusing to adjust your job duties to meet the light-duty restrictions ordered by your doctor.
o Denying you a promotion.
o Reducing your wages and/or benefits.
The law does not consider the above actions to be employer discrimination if you have:
o Failed to learn and follow safety or health rules.
o Not followed your employer’s policies.
o Numerous on-the-job injuries.
For more information, see: Workers’ Compensation Discrimination
• How do you file a complaint?

1. Contact L&I: We can help you determine if you have been discriminated against. Call 360-902-9155.
2. Obtain a complaint form (in English or Spanish):
o On the web at www.LNI.wa.gov/forms/pdf/262009af.pdf
o From your local L&I office.
Note: We also will accept complaints in a written letter. However, we encourage you to use the form. It will show you exactly what information we need.
3. Mail your completed complaint form to:
Department of Labor & Industries
PO Box 44277
Olympia, WA 98504-4277

Or, if you wish, mail to any representative of the Department of Labor & Industries, such as a customer service representative or claim manager.

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