Another Employer Charged With Fraud

I see today, in my Google News page, that an employer in Sacramento has been charged with fraud for "misrepresenting fact to obtain insurance at less than proper rate".

Allegedly, this roofing contractor failed to report proper payrolls for use in computing WC premium. News stories such as this one are a daily item in my Google News page (which I have set up to scan for news items about Workers Compensation insurance). In fact, today's Google News page has items not just about this California case, but also about employers in New York and Louisiana being charged with Workers Comp premium fraud. Employers should take heed of this trend.

I suppose there have always been some employers who have felt it ok to try to "fudge" their payroll numbers, thinking it's just a hardball negotiating tactic with their insurer, with no downside risk. Employers need to realize that they run the risk of criminal penalties when they engage in such activities.

I've served as an expert witness in several criminal cases involving these issues, and I have observed how devastating such criminal charges can be to a business person.

Employers need to protect themselves from excessive Workers' Comp premium charges--my consulting work has found that insurance companies often overcharge employers--but they also need to resist the temptation to reduce premium improperly. Otherwise, they may end up as another sad news story on Google News.